Week Ahead

The market recorded gains for sixth consecutive week ending July 12 and saw a fresh all-time closing high, driven majorly by technology following TCS earnings and FMCG stocks.

The BSE Sensex climbed 523 points or 0.65 percent to 80,519, and the Nifty 50 jumped 178 points or 0.73 percent to 24,502, while the Nifty Midcap 100 and Smallcap 100 indices ended moderately higher, underperforming the benchmark indices.

We expect this market momentum to continue supported by the expectation of healthy quarterly results, hope of a rate cut, and a pre-budget rally.

The flow of corporate earnings will pick up in the coming week and the participants seem happy about technology stocks especially after TCS reporting in-line numbers as the Nifty IT index extended rally for fourth consecutive week. Over 190 companies will release their quarterly earnings next week.

The key results to watch include Reliance Industries, Infosys, HDFC Bank, HDFC Life Insurance Company, Bajaj Auto, Asian Paints, LTIMindtree, JSW Steel, UltraTech Cement, Wipro, Kotak Mahindra Bank, and Bharat Petroleum Corporation, which have over 36 percent weightage in the Nifty 50.

Technically, the Nifty 50 is likely to remain positive along with intermittent consolidation next week, with 24,600 seems to be key level to watch for further upside towards 24,800 and then 25,000, while the 24,300 is expected to be immediate support and 24,000 to be crucial support for further downside if any.

The Nifty is exhibiting strong momentum and is approaching the psychological mark of 25,000. While some momentum indicators are signaling overbought conditions, the market may remain overbought for a while longer.

The weekly options data indicates the 25,000 is expected to be key resistance area for the Nifty 50 in coming days, with crucial support at 24,000 mark, while the immediate resistance and support may be at 24,700 and 24,400 levels.