The Indian equity benchmark indices lost nearly 2 percent in a highly volatile week ended April 22. Mixed earnings by corporates, rising bond yields, the Russia-Ukraine war, high inflation and anticipation of an aggressive rate hike of 50bps by the US Federal Reserve in May dampened the investor sentiment.
Yesha Shah, Head of Equity Research, Samco Securities | Market sentiment this week will primarily be driven by the quarterly results and the monthly expiry. As Covid cases are rising in some parts of the country, the pace of the spread will be closely watched. Globally, movement in treasury yields and the dollar index, coupled with developments in the Ukraine-Russia conflict, will influence market movement. While no other major domestic or global macro events are scheduled during the week, the factors highlighted above will keep the market choppy. Investors are advised to navigate prudently and avoid aggressive trades.
Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One | Though we remain hopeful till the 17,000–16,800 level is defended, the overall positioning is not so convincing. So, the first couple of sessions will be crucial for markets. One must keep a close tab on how global markets behave. As far as levels are concerned, 17300–17450 is to be treated as immediate hurdle, while the support remains at 17,000–16,800. Traders are advised not to move aggressively till the trend becomes clear and also, unlike the previous weeks, we are not left with any convincing idea in individual stock as well. So one needs to be selective in stock-centric approach and ideally follow strict stop losses for momentum bets.
Prashanth Tapse, Vice President (Research), Mehta Equities | Caution should be the buzzword for near-term trading, as it is getting really difficult to analyse a trend. Also, the sentiments which is primarily influenced and focused on a super hawkish inflation-fighting Fed narrative stoking recession fears. After depressed closing on April 222, it will be difficult for investors to look forward to a sustained recovery. if the Nifty can't move above its weekly high of 17,415, a much more severe selloff looms, which can see the Nifty slip to 17,000 and then 16,597.
Manish Shah, Independent Technical Analyst | The Nifty needs to resolve out of the range. For the rally to gather steam, the Nifty has to move above 1,7450 for the upmove to continue to 17,650 and then 18,100. The Nifty is in the support area 16,800 and a break below it could see the index decline to 16,400.
Sumeet Bagadia, Executive Director at Choice Broking | On the daily chart, the Nifty has failed to close above 17,200, indicating traders will opt to sell on rise. Immediate support of 17,000 has already been violated, so the next support would be on 16,800 followed by 16,600. The short-term investors may opt for stock-specific action with a positive bias. Indicators such as MACD and RSI show negative crossover, further pointing to weakness in price action. Overall, the Nifty has support at 16,800, while resistance at 17,550 followed by 17,650, while for the Bank Nifty, support is placed at 35,500 followed by 35,200 and resistance at 37,200.
Amol Athawale, Deputy Vice President - Technical Research, Kotak Securities | Technically on weekly charts, the Nifty formed a long-leg Doji candle, which indicates indecisiveness among the bulls and bears. In the week gone by, the Nifty, after a long time, broke the level of 200 days SMA. It also broke the sacrosanct support level of 17,000. However, post breakdown it bounced back sharply from the 16,825, the weekly lowest level. After a volatile momentum, the Nifty is trading near 200 and 50-day SMA. We are of the view that the short-term texture of the market is non-directional. For the bulls, the fresh pullback rally is possible only after 17,280 breakouts. Above which, the index could move to 17,400-17,550. On the flip side, as long as the Nifty trades below 200-day SMA or 17200, the correction wave is likely to continue. Below it, the Nifty can retest the level of 17,000-16,800.
Harsh Parekh, Technical Analyst, Bonanza Portfolio | The index still trades below its 21, 50 and 100-day moving averages, a warning to remain cautious on the long side. Prices are respecting the 200-day EMA, placed near 16,850. The Nifty will look for immediate support near 16,950-17,050 and on the upside, resistance can be faced near 17,250-17,300. The hawkish statement from the US Fed dented sentiment globally. Besides, global cues like updates on the Russia-Ukraine crisis and China’s COVID situation will also remain on the participants’ radar.
Milind Muchhala, Executive Director, Julius Baer | The markets seem to be slightly cautiously positioned, as the Q4FY22 earnings season has begun on a mixed note with small disappointments from a couple of large sectoral majors. Hence, investors may wait for more results and hear out the accompanying commentaries to gauge if concerns about earnings cuts are creeping in. The impending concerns about elevated commodity prices due to geopolitical situation and supply-chain challenges, and with increasing expectations of a harsher hike by the US Fed, the market may continue to be volatile in the near term. A prolonged geopolitical situation and elevated prices can gradually start weighing on demand, profitability and growth estimates. Lastly, the government seems to be getting ready to launch the mega IPO of LIC, which may also put some near-term pressure on the secondary markets due to the large supply of fresh paper. We have been cautious on the markets for the past few weeks and suggest creating some liquidity in the recent pullback, as the uncertainty and volatility is likely to continue for some more time with too many moving parts, providing intermittent opportunities.
Ajit Mishra, VP Research. Religare Broking | We expect volatility to remain high during the week due to the expiry of April month derivatives contracts. Besides, global cues like the Russia-Ukraine war, China’s COVID situation, and the performance of the global indices will continue to weigh on the sentiment. Global cues are largely dictating the trend as the beginning of the earnings season has failed to impress the Street so far. We believe traders would continue to face tough times due to excessive news flow, causing erratic swings in markets. On the index front, the Nifty must defend 16,800 for any meaningful recovery else the tone would turn more bearish. In case of a rebound, it would face a hurdle around 17,450 and then 17,700. We suggest limiting overnight leveraged trades and focusing more on themes that are showing consistency.
Siddhartha Khemka, Head-Retail Research, Motilal Oswal Financial Services | Global cues like hawkish Fed commentary, rising inflation and bond yields, slowing economic growth, prolonged war in Ukraine and volatile crude prices are causing uncertainty. Continuous selling by FIIs and weak results by some heavyweights have further added to the pressure. If the Nifty remains below 17,350, it may see weakness towards 17,000 and 16,950 zones. The index is likely to remain volatile in the broader trading range with the absence of follow-up activities on both sides. We suggest selective buying in resilient stocks where the quarterly result has been good despite the current uncertain scenario. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
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