Week Ahead

Benchmark indices recorded gains for the fifth straight week during the one that ended on July 5, surging around 8 percent during the period. Going ahead, we expect the trend to largely remain positive, however, bouts of volatility can be seen with the onset of the Q1 earnings season and the release of US and India inflation numbers.

Key factors to watch include expectations around the Union Budget and the Q1 FY25 earnings season. Individual stocks will also be under scrutiny based on their Q1 FY25 earnings and management commentary in the upcoming weeks. Investors will also keep a close eye on FII and DII fund flows, as well as crude oil prices, to gauge overall sentiment.

Sector-specific movements are anticipated amid budget-related buzz. While the underlying sentiment remains bullish, bouts of profit booking may also be seen.

We anticipate the index to continue consolidating, with a generally positive outlook. Traders should concentrate on stock selection and trade management, keeping in mind the potential for increased volatility.

The Q1 FY25 earnings season is back, with companies slated to release their quarterly numbers this week onwards. Information technology giant, TCS will kickstart the season and release its Q1 numbers on July 11 followed by HCL Technologies which will detail its results on July 12. Avenue Supermarts will also follow the cue, with earnings slated to be released on July 13.

The Q1 earnings season will also trigger a bout of stock-specific action.

After showing minor weakness from the highs in the last couple of sessions, the Nifty 50 witnessed buy-on-dips action on July 5, closing on a flattish note. "Following this, a reasonable bullish candle has been formed on the daily chart after opening lower and with minor upper and lower shadows. Technically, this market action signals the formation of a bullish counterattack type candle pattern, which signals possible comeback of bulls after a small dip.

The underlying trend of Nifty continues to be positive. There is a possibility of an upside breakout hurdle around 24,400-24,500 levels in the next few sessions. Immediate support is at 24,170 levels.

The weekly options data indicates that the Nifty is likely to achieve 24,500 in coming sessions, followed by 24,800, provided it holds 24,000.