Domestic equity markets continue to witness range-bound but volatile trading action. Headline indices, S&P BSE Sensex and NSE Nifty 50 enter the new week after jumping a little over 1% in the previous one. Currently, Sensex sits at 55,769 while the Nifty 50 index is at 16,584 points. India VIX, the volatility gauge, is just shy of 20 points. SGX Nifty was down with losses ahead of Monday’s trade, suggesting a weak opening to the day’s trade. Global cues were mixed during the early hours of trade.
Global watch: On Friday, Wall Street equity indices closed with losses. NASDAQ slumped 2.47%, followed by S&P 500, and the Dow Jones. Asian markets were mixed with Shanghai Composite and Hang Seng trading with losses while Nikkei 225 and TOPIX were down with losses.
What do the charts say: On Friday, Sensex ended with marginal losses while Nifty 50 fared a tad bit worse. The index formed a long negative candle on the daily chart after opening higher, according to Nagaraj Shetti, Technical Research Analyst, HDFC Securities. “Technically, this pattern indicates a formation of counter attack of bears type candle pattern (not a classical one) at the highs. But, the formation of such a pattern amidst a range movement rules out any sharp negative impact as of now,” he added.
Levels to watch out for: 16750-16850 will be seen as a major resistance zone now and the immediate support is placed around 16450-16400, said Ruchit Jain, Lead Research, 5paisa.com. He added that if the support is breached, markets could correct towards 16200-16000 in a short period of time. Further, Nagaraj Shetti said the near term uptrend status of the Nifty remains intact and there is no sign of any reversal yet from the highs. He added that support for the Nifty is around 16400-16350 levels and the Nifty could show an upside bounce from the lower levels. “Sustainable up-move could only resume above the hurdle of 16800 levels,” Nagaraj Shetti said.
Eyes on RBI’s MPC: From today the RBI’s Monetary Policy Committee (MPC) will begin its bi-monthly deliberations. Stock markets will keep tabs on the MPC and any comments coming from the RBI on inflation and growth projections. Earlier last month, the MPC met out of schedule and hiked interest rates.