Expect volatility to remain high amid monthly expiry; 14,200 key support for Nifty: Experts

Union Budget 2021 could mark the reversal of the uptend in market. Hence, long positions need to be protected with appropriate stop loss, said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

January 25, 2021 / 08:22 AM IST
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Last week, the market ended marginally lower amid volatility on the back of profit-booking after the BSE Sensex surged past 50,000 for the first time and the Nifty climbed to 14,750 level during the week. The Sensex fell 156.13 points, or 0.31 percent, to end at 48,878.54 and the Nifty50 slipped 61.8 points, or 0.42 percent, to finish at 14,371.9. Here's what experts have to say about the upcoming week:
Rusmik Oza, Executive Vice President, Head of Fundamental Research at Kotak Securities | We can expect volatility to remain high next week also as there will be the monthly expiry and it will be the last week before the Union Budget. Earnings print is coming good and we are seeing more upgrades than downgrades. Nifty-50 could remain in the 14,000-15,000 range till budget and any break-out or break-down from this range could be seen post budget.
Rusmik Oza, Executive Vice President, Head of Fundamental Research at Kotak Securities | We can expect volatility to remain high as there will be the monthly expiry and it will be the last week before the Union Budget. Earnings print is coming good and we are seeing more upgrades than downgrades. Nifty50 could remain in the 14,000-15,000 range till budget, and any break-out or break-down from this range could be seen post-Budget.
Ajit Mishra, VP - Research, Religare Broking | Markets will first react to Reliance numbers in early trade on Monday. The recent underperformance from the banking pack might derail the momentum if it continues next week as well. On the benchmark front, we feel a decisive break below 14,200 in Nifty could result in further slide else we will see range-bound sessions ahead. Amid all, there’ll be no relief from the volatility front due to the prevailing earnings season and upcoming derivatives expiry. We thus strongly advise keeping a check on naked leveraged positions and waiting for further clarity.
Ajit Mishra, VP - Research, Religare Broking | Markets will first react to Reliance numbers in early trade on Monday. The recent underperformance from the banking pack might derail the momentum if it continues next week as well. On the benchmark front, we feel a decisive break below 14,200 in Nifty could result in further slide else we will see range-bound sessions ahead. Amid all, there’ll be no relief from the volatility front due to the prevailing earnings season and upcoming derivatives expiry. We thus strongly advise keeping a check on naked leveraged positions and waiting for further clarity.
Markets - Image: Reuters
Nagaraj Shetti, Technical Research Analyst, HDFC Securities | The emergence of frequent back to back weakness from the highs indicate higher chances of reversal in the market. The formation of weekly pattern signal high volatility and 'sell on rise' possibility. The Union Budget 2021 is expected to be an event for the market to form a reversal. Hence, long positions need to be protected with appropriate stop-loss. A decisive move below 14,220 could open a larger downward correction in the market and any rise from here is likely to attract selling pressure around 14,460-14,520 levels by next week.
Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities | We are of the view that, the structure of the index is volatile and likely to continue for the next couple of weeks. In the short run, Reliance Industries quarterly result outcome and global market trend would be the important triggers for the market. Technically, post strong uptrend rally the Nifty has formed Bar Reversal candle stick pattern which clearly indicates indecisiveness between bulls and bears. However, the medium term texture of the Nifty is still bullish and likely to continue in the medium term. Bar Reversal kind of candle and daily charts formation indicates red flag near 14,750/50,185 level. Hence strong possibility of quick short term price correction is not ruled out in the near term. For the next few trading sessions, 14,220/48,400 should be the sacrosanct level for the trend following traders, if it sustain above the same then uptrend texture likely to continue up to 14,600-14,750/48,800-49,100. Further upside may also be possible that could lift the index till 14,855/49,450. On the flip side, dismissal of 14,220/48,400 possibly open another leg of correction till 14,125-14,000/48,100-47,600.
Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities | We are of the view that the structure of the index is volatile and likely to continue for the next couple of weeks. In the short run, Reliance Industries quarterly result outcome and global market trend would be the important triggers for the market. Technically, post strong uptrend rally the Nifty has formed Bar Reversal candle stick pattern which clearly indicates indecisiveness between bulls and bears. However, the medium-term texture of the Nifty is still bullish and likely to continue in the medium term. Bar Reversal kind of candle and daily charts formation indicates red flag near 14,750/50,185 level. Hence, a strong possibility of quick short term price correction can not be ruled out in the near term. For the next few trading sessions, 14,220/48,400 should be the sacrosanct level for the trend following traders, if it sustains above the same then uptrend texture is likely to continue up to 14,600-14,750/48,800-49,100. Further upside may also be possible that could lift the index till 14,855/49,450. On the flip side, dismissal of 14,220/48,400 possibly open another leg of correction till 14,125-14,000/48,100-47,600.
Shabbir Kayyumi, Head of Technical Research at Narnolia Financial Advisors | In the last few days, RSI had given a breakout by trading above 50 levels from below and made a high of 80 then after that it is retracing towards the centerline placed at 50 levels, this behavior is called as ‘RSI PBB’ setup. RSI PBB is pull back buy setup which indicates, once RSI turns its tail upside after taking support from the zone of 45-55 levels, the target will be previous swing high of RSI which was 80 or previous swing high of prices (14750). Currently, the NIFTY is going through this setup and we expect a higher price movement once it crosses and sustains above 14500 marks. Nifty has formed outside bar formation on the weekly chart and traded in a zone of 14300-14750 in the last few days. This is typical behavior of wave ‘IV’ in progress and another impulse wave for higher targets will progress once we get confirmation of the conclusion of wave ‘IV’.
Shabbir Kayyumi, Head of Technical Research at Narnolia Financial Advisors | In the last few days, RSI had given a breakout by trading above 50 levels from below and made a high of 80 then after that it is retracing towards the centerline placed at 50 levels, this behaviour is called as ‘RSI PBB’ setup. RSI PBB is pull back buy setup which indicates, once RSI turns its tail upside after taking support from the zone of 45-55 levels, the target will be previous swing high of RSI which was 80 or previous swing high of prices (14750). Currently, the Nifty is going through this setup and we expect a higher price movement once it crosses and sustains above 14500 marks. Nifty has formed outside bar formation on the weekly chart and traded in a zone of 14300-14750 in the last few days. This is typical behavior of wave ‘IV’ in progress and another impulse wave for higher targets will progress once we get confirmation of the conclusion of wave ‘IV’.
Rakesh Patil
first published: Jan 25, 2021 08:22 am

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