If Nifty holds above 12150 levels, then an up move towards 12,300 and 12,350 cannot be ruled out. However, major support remains intact at 12,100 and 12,050 levels.
Small and mid-caps outperformed despite the International Monetary Fund's (IMF) below 5 percent India GDP forecast for 2019-20 and subdued banking sector results which triggered profit-taking on D-Street and pushed benchmark indices lower.
The S&P BSE Sensex and Nifty50 fell 0.8 percent respectively for the week ended January 24 while the S&P BSE Mid-cap index was up 0.73 percent, and the S&P BSE Small-cap index rose 0.93 percent in the same period.
There are as many as 28 stocks in the S&P BSE Small-cap index that rose 10-30 percent. These include names such as Gujarat State Fertiliser, Power Mech, IIFL Finance, Jaypee Infratech, Alok Industries, Can Fin Homes, Unitech and Axiscades Engineering Technologies Ltd.
In the S&P BSE 500 index, there were as many as 13 stocks that rose 10-30 percent, including Bharti Infratel, Max India, Varun Beverages, Westlife Development, AU Small Finance Bank and Vodafone Idea.
The Nifty Mid-cap 100/Nifty Small-cap 100 rose 0.9 percent and 0.8 percent, respectively. Market sentiments were also supported by the huge buying seen from foreign investors.
Foreign institutional investors (FIIs) pumped in nearly Rs 2,000 crore in the past two trading sessions of the week, provisional data showed. Global cues also supported the sentiment after the World Health Organisation (WHO) designated the coronavirus infection an emergency for China, but not yet for the rest of the world.
The market recovered in the second half of the week which suggests that bulls have not given up yet and we could see a continuation of the rally in the coming week.
The Nifty50 closed in the negative for the week ended January 24 but it managed to reclaim 12,200 levels which is a positive sign for the bulls after hitting a swing low of 12,087 in the week gone by.
Nifty formed a Bullish Candle on a daily chart whereas Bearish Engulfing gets formed on Weekly scale, and negated its formation of lower highs after four trading sessions which indicates the strength, suggest experts.
“Market would trade cautiously as a lot of macro data on the global and domestic front would be announced along with the Union Budget. Momentum oscillator RSI also took support around its recent swing lows of 44 – 46 zone and turned northwards,” Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Private told Moneycontrol.
“Going forward, if Nifty holds above 12150 levels, then an up move towards 12,300 and 12,350 cannot be ruled out. However, major support remains intact at 12,100 and 12,050 levels,” he said.
On the options front, maximum Put open interest (OI) is placed at 12,000 followed by 12,200 strikes, while maximum Call OI is placed at 12,500 followed by 12,300 strikes.
A good amount of writing was seen in 12,200 and 12,250 Put options; while marginal Call writing is seen at 12,450 followed by 12,350 strikes. Options data indicates a trading range between 12,000 to 12,500 zones.
India VIX fell down by 1.89 percent at 15.56 levels. However, volatility likely to stay higher ahead of the upcoming Union Budget, suggest experts.
“Nifty formed a Bullish Candle on daily chart whereas Bearish Engulfing gets formed on Weekly scale, which implies that supply is visible at higher levels; but at the same time decline is being bought into,” as per Chandan Taparia, Vice President, Analyst-Derivatives at Motilal Oswal Financial Services.
“Momentum oscillator RSI has also taken support around its recent swing lows of 44-46 zone and turned northwards. Going forward, if Nifty holds above 12,150 levels, then an up move towards 12,300 and 12,350 cannot be ruled out. However, major support remains intact at 12,100 and 12,050 levels,” he said.
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