IT stocks will be in the limelight today after TCS reported mixed numbers, with a bullish commentary.
TCS chief executive Rajesh Gopinath is upbeat on the US and UK markets, but not so much on Europe. Tech stocks have been one of the biggest underperformers and there is nothing at this point to suggest that things may improve dramatically in the near term. Global cues are mixed, with European shares rallying and US shares ending mixed.
There has been a risk-on rally in metals, which remains a major theme. In what could be a major relief to bulls, FII selling has decreased, and there has been a fair amount of short covering in the F&O segment as well. The Nifty and Bank Nifty are now in a congestion zone.
Nifty outlook
The Nifty is currently in a declining 20-day moving average phase. It will likely test the 20 DMA (daily moving average) and 20 DEMA (daily exponential moving average) zone again. The 20 DMA is at 18,194, while the 20 DEMA is at 18,172. During the last test, the Nifty halted at the 20 DEMA and saw a significant drop. For the uptrend to continue, the Nifty needs to close above 18,200. Its new base is now at yesterday's low of 17,936.
Bank Nifty outlook
The Bank Nifty closed above crucial levels, including the 50 DEMA and 42,500. The current 50 DEMA of 42,430 is now the new base. There is resistance for the Bank Nifty between the 10 and 20 DEMA, with the 10 DEMA at 42,800 and the 20 DEMA at 42,870. The Fin Nifty expiry is today, which may impact the Bank Nifty.
Global Cues
All eyes are on Federal Reserve Chair Jerome Powell's speech. The market is aware of what Powell will generally say, and unless he deviates significantly from the script, things should be OK. The Dollar Index has fallen below 103, which is conducive for a major commodity rally. The commodity rally is negative for India's macroeconomic outlook. All commodities, except crude oil, are up.
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