Week Ahead...

The benchmark indices nosedived sharply by more than 2 percent in the week ended January 10, while the broader markets were also not spared, in fact falling far more than the frontline indices after the downward revision in full year GDP growth estimates, rising oil prices, and consistent selling by FIIs.

The Nifty 50 plunged 573 points (2.39 percent) to 23,432, the lowest level since June 2024, and the BSE Sensex tanked 1,844 points (2.33 percent) to 77,379, while the Nifty Midcap 100 and Smallcap 100 indices were down 5.77 percent and 7.3 percent, respectively. All sectors, barring IT, were under pressure.

After the sharp correction, the market is expected to consolidate next week starting from January 13, focussing on Q3 earnings, monthly inflation data (by India, US and Europe), China's quarterly growth numbers, and oil prices. The stock-specific action will also be seen due to pick up in the corporate earnings season.

Technically, the bearish sentiment prevails in the market with the Nifty last week reaching to the lowest level since June 2024, forming long bearish candlestick pattern. The index closed tad below 50-week EMA (23,442) as well as dropped below the long upward sloping support trendline, with negative bias in momentum indicators RSI and MACD, signalling weakness. If the index sustains below 50-week EMA, it may reach to the first target of 23,263 (November low), followed by 22,800 being the next target on the downside, however, in case of recovery, the index may face hurdle at 23,700 (200-day EMA) going ahead.

The weekly derivative data indicates that the Nifty may remain in the range of 23,000-24,000 in the short term.