Week Ahead

The BSE Sensex corrected more than 800 points to 58,834, and the Nifty50 declined 200 points to 17,559, as technology, pharma, financial services, select FMCG and auto stocks were under pressure.

However, there was outperformance by the broader markets due to upside in last three sessions, hence the Nifty Midcap 100 and Smallcap 100 indices gained 0.35 percent and 1.5 percent during the week.

On Monday, the market may react negatively to Fed Chair Jerome Powell's comments saying that the rate hikes will continue to bring inflation at 2 percent target, at the cost of pain in consumers and businesses, but overall, the coming truncated week is expected to continue to see volatility and consolidation, with focus on global cues as well as Reliance Industries' AGM, macroeconomic data points, and monthly auto sales numbers.

Technically Nifty50 has seen a formation of bearish candle on the daily charts and there was Hanging Man as well as Evening Star kind of pattern formation on the weekly scale, indicating a bit of correction or profit booking in coming session but the major fall is unlikely with capping of upside.

After hitting a long downward sloping resistance trend line, the index failed to sustain the same followed by trading in broad range of 17,300-17,800 levels. Overall the volatility and consolidation are expected to continue in short term, as the index has, so far, has taken a support at 17,300, hence the breaking of same can bring the index near 17,000 mark, whereas the decisive close above 17,800 can push the index above psychological 18,000 mark.

The Option data also indicated a trading range of 17,300-17,800 levels in an immediate term, while the broader range is expected to remain in between 17,000 to 18,000 levels.