Expect volatility to continue amid RBI policy, crude price movement: Experts With the beginning of the new fiscal year, markets will be closely eyeing the MPC’s monetary policy review outcome scheduled on April 8. Participants are expecting the status quo however their commentary on inflation and growth would be critical amid global tightening, says Ajit Mishra, VP Research. Religare Broking.
April 04, 2022 / 07:11 AM IST
Indian benchmark indices rallied 3 percent in the volatile week ended April 1 with foreign institutional investors (FIIs) turning net buyers after Russia-Ukraine peace talks and declining crude oil prices. However, inflation and rising COVID cases in some parts of the world remained a concern. For the week, BSE Sensex added 1,914.49 points (3.33 percent) to end at 59,276.69, while the Nifty50 rose 517.45 points (3.01 percent) to end at 17,670.45 levels.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas | The Nifty managed to cross the key barrier of 17,500 on a closing basis on April 1. The weekly chart shows that the index had a sustained rise throughout the week and formed a bullish outside bar on the weekly chart. Also, on the daily chart, the Nifty formed a bullish outside bar along with an Engulfing bull candle on Friday. This shows that the bulls are having an upper hand. The daily upper Bollinger Band has started expanding on the upside thus creating room for the index in the higher territory. All these observations suggest that the index is set to test the level of 18,000 on the upside. On the downside, the near term support zone shifts higher to 17,500-17,420.
Rahul Sharma, Co-founder, Equity 99 | For this week, the IT pack will be in focus. Investors are advised to keep booking partial profits as and when their targets are achieved. For the Nifty50, 17,620 will act as very strong support level, if this level is breached intraday, then 17,550 will act as next strong support, after which 17,470 will be next support level. On the upper side, 17,770 will be 1st hurdle rate, once this level is breached on upper side, then the next resistance will be at 17,850 levels post which 17,900 will act as next strong resistance level.
Parth Nyati, Founder, Tradingo | On the upside, 17,800 is an immediate target, while 18,000-18,100 is the critical resistance zone. On the downside, 17,500-17,450 will act as an immediate base, while 17,300 is the next support level. Bank Nifty started to outperform following a breakout of the critical resistance zone of 36,700-37,000 and we may see further strength towards the 38,000 level. On the downside, 36,700-36,500 will act as an immediate demand zone, while 36,000 is the next support level. Indian equity markets may continue to outperform where movements of global markets, crude oil prices, FII trend, and development on Ukraine was will remain key factors.
Sachin Gupta, AVP- Research at Choice Broking | Technically, the Nifty index has formed a Bullish Engulfing Candlestick pattern on the daily chart and also settled above 21-Days Exponential Moving Averages. On a weekly chart, the Nifty index has moved above Middle Bollinger Band formation, which suggests bullish strength for the near term. A momentum indicator RSI (14) and MACD indicated positive bias. At present, the index has support at 17470 levels while resistance comes at 17800 levels. On the other hand, Bank Nifty has support at 36600 levels while resistance at 37800 levels.
Mohit Nigam, Head - PMS, Hem Securities | On the technical front, the key resistance level for Nifty50 is 18100 and on the downside 17400 can act as strong support. Key resistance and support levels for Bank Nifty are 37600 and 36600, respectively.
Rupak De, Senior Technical Analyst at LKP Securities | On Friday, Nifty moved up smartly after a consolidation of two days. The price moved above the previous swing high confidently, suggesting a rise in optimism. Going ahead, the trend is expected to remain positive. On the higher end, the price has resistance at 17750-17800; above 17800, the price may move towards 18000. On the lower end, support is visible at 17500.
Manish Shah, Independent Technical Analyst | For the coming week expect the market to continue its upward bias and there is a strong possibility of a rally coming towards 18000-18100. Support on the Nifty is pegged at 17400. As long as Nifty holds above 17400 we should expect the market to continue its up side bias. Traders should enter the market with a bullish bias.
Amol Athawale, Deputy Vice President – Technical Research, Kotak Securities | Technically, after a 17450 breakout the Nifty has maintained breakout continuation formation which is broadly positive. In addition, strong bullish candle on weekly charts along with higher bottom formation also support further uptrend from the current levels. However, traders may prefer to take cautious stance near the 17800 resistance level due to the market being in an overbought situation. The current texture is likely to continue unless the index slips below 17450 or 10-day SMA. Above the same, we could see Nifty touching the level of 17,800 and further upside could lift the index up to 17935. On the flip side, 10-day SMA or 17450/58400 would be the sacrosanct level for the positional traders and below the same, the index could slip to 17350-17200 levels.
Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One | Now since the banking space has taken charge again, the rally should be considered healthy and due to this, we will not be surprised to see 17800 or even the psychological mark of 18000 in the forthcoming week. On the flipside, 17500 followed by 17350 should now provide a decent support. Considering the ongoing momentum, any intra-week decline in the mentioned support zone should be used as a buying opportunity. Along with frontline movers, traders should focus more on ‘Cash’ segment stocks; which are all geared up to make a real move in the coming days.
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services | Decline in crude oil prices and de-escalating Russia-Ukraine conflict is boosting the positive sentiments in the market. Even India VIX is now below 20 levels and is further supporting the positive momentum in the market. Bulls are now showing lot of strength with Nifty closing above key hurdles and at the highest level in 10 weeks. Buying in key heavyweight sectors is helping the Index to sustain well at higher zones. Market breadth is also turning favourable, indicating broad based action. After a long stretch of underperformance – attractive valuations and hopes of resolution of war is creating interest in sectors like Media, Realty, Financials, Auto and Private Bank.
Ajit Mishra, VP Research. Religare Broking | With the beginning of the new fiscal year, markets will be closely eyeing the MPC’s monetary policy review outcome scheduled on April 8. Participants are expecting the status quo however their commentary on inflation and growth would be critical amid global tightening. On the macro front, participants will be eyeing manufacturing and services PMI data on April 4 and April 6 respectively. Amid all, global cues viz. updates on the Russia-Ukraine war, movement of crude will remain in focus. Markets are moving largely in sync with their global counterparts and positive developments on the Russia-Ukraine front could further fuel the rebound. Besides, we expect stock-specific moves on earnings expectations. Almost all the sectors are contributing to the rebound now however the contribution of the banking pack is critical for Nifty to test the 17,800-18,100 zone ahead. Participants should align their positions according and avoid contrarian trades.
Yesha Shah, Head of Equity Research, Samco Securities | FOMC minutes which will be published next week will influence markets globally. Back home, the RBI's MPC meeting will be the talk of the town, driving market sentiment. Unlike its peers abroad, RBI has thus far prioritized growth over inflation. The shifting macro-dynamics caused by the war, the FED's planned rate hikes, and the need to foster domestic demand and support the government's increased borrowing indicated in the budget have placed the RBI in a tricky situation and all eyes will be on how the RBI decides to approach these. These variables, along with the pricing of earnings season expectations, can trigger jittery fluctuations in our markets. Investors are thus encouraged to exercise caution before making any aggressive bets.
Dr Joseph Thomas, Head of Research, Emkay Wealth Management | The equity markets closed the week on a bullish note after many weeks of volatility and turmoil caused by the anticipations about Fed policy changes, and then by the policy change itself as the Fed hiked the target rate, and subsequently by the developments around the Russian invasion of Ukraine. While factors like high fuel prices, and the lingering inflationary pressures, and the still uncertain course of the developments in Eastern Europe, etc. may exert some influence on the markets in the coming days. Any moderation in any of these factors and their intensity will have a huge positive impact on the market sentiment. Vinod Nair, Head of Research at Geojit Financial Services | In the coming days, the major focus of the market will be on Russia- Ukraine war, movement in crude prices and RBI’s policy announcement due next week. The volatility is expected to continue in the market until commodity prices subside and supply constraints get resolved.