Week Ahead...

The market managed to recover a bit of losses in the last week ended December 27 and closed with nearly a percent gains. Overall, it was a rangebound week due to lack of major triggers on the domestic as well as global front due to the start of year-end and holiday season.

The Nifty 50 rose 226 points (0.96 percent) to 23,813.4, and the BSE Sensex climbed 657 points (0.84 percent) to 78,699, while the Nifty Midcap 100 and Smallcap 100 indices underperformed benchmarks, up 0.13 percent and 0.22 percent, respectively. Banking, FMCG, auto and pharma stocks gained while IT and metal stocks were under pressure.

For the coming week starting from December 30, the market is expected to remain rangebound with focus on the Manufacturing PMI numbers and monthly auto sales data, while in the short term, the focus may gradually shift to December quarter earnings and Union Budget.

Technically, the Nifty 50 remained ranged at 23,650-23,950 for the last week, forming small bullish candle with upper and lower shadows on the weekly timeframe, indicating rangebound trading, after a sharp fall in the previous week, when it reported long bear candle. We expect the rangebound trading to sustain in the coming week too with hurdle on the higher side at 24,000 (as sustaining above it can drive the index towards 24,300 zone) and support on the lower side at 23,650 (as breaking below it can push the index down to 23,500), though overall, the sentiment remains bearish considering the index traded below 10 and 20-week EMAs as well as in the lower band of Bollinger bands.

The derivatives data suggested that the Nifty 50 index is likely to be in the broad range of 23,500-24,500 in the coming week as breaking and sustaining of either side can give firm direction to the market going ahead.

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