Moneycontrol PRO

Market may remain volatile amid monthly expiry, auto and US GDP numbers: Experts

Volatility is expected to remain high this week as well due to the expiry of monthly derivatives contracts. Global indices, especially in the US, oil prices and monsoon will also be closely tracked

June 27, 2022 / 07:55 AM IST
fando,sensex,nifty,derivative
Last week, the market snapped two-week losing streak and gained more than 2 percent helped by the positive global cues, falling crude oil prices and reduced FII selling. The market though remained volatile through the week with bouts of selling on some days.
Manish Shah, Independent Technical Analyst | Nifty needs to break above 15850 to signal a rally to 16200-16300. Support in Nifty is at 15400. A break below the support and there could be a further drop to 15100-15000. Bank Nifty closed the week sharply higher and it seems that the support at 32480-32000 seems to be holding. Bank Nifty seems to be a better buying opportunity than Nifty as the support is better defined. If Bank Nifty moves above 33,750 we should see some more upsides towards 34700-34800. Most socks within the banking space are in an accumulation phase.
Manish Shah, Independent Technical Analyst | The Nifty needs to break above 15,850 to signal a rally to 16,200-16,300. Support for the Nifty is at 15,400. A break below the support could see the index slip to 15,100-15,000. The Bank Nifty closed the week sharply higher and seems to be holding the support at 32,480-32,000. The Bank Nifty seems to be a better buying opportunity than the Nifty as the support is better defined. If the banking index moves above 33,750, we can see some more upsides towards 347,00-34,800. Most socks within the banking space are in an accumulation phase.
Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities | Monsoon progress is an important factor to watch as good monsoon would calm concerns with respect to food inflation. Equity markets in the near term are expected to continue reacting to news related to inflation, monetary policy and commodity price movement.
Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities | Monsoon progress is an important factor to watch, as good rains will assuage concerns about food inflation. In the near term, equity markets are expected to continue reacting to news related to inflation, monetary policy and commodity price movement.
Amol Athawale, Deputy Vice President - Technical Research, Kotak Securities | Technically, on weekly charts the Nifty has formed a long bullish candle which is broadly positive. On daily and intraday charts, the market is holding a higher bottom formation that also supports short term uptrend. For the bulls 15700-15750 would act as a key resistance level, while on the flip side 15500 and 15400 could be strong support zones for the short term traders. Above 15750, the index could move up to 15850-15925. On the other side, a fresh round of selling is possible only after 15400 and below the same it could retest the level of 15250-15150.
Amol Athawale, Deputy Vice President-Technical Research, Kotak Securities | Technically, on weekly charts, the Nifty has formed a long bullish candle, which is broadly positive. On the daily and intraday charts, the market is holding a higher bottom formation that also supports a short-term uptrend. For the bulls, 15,700-157,50 will act as key resistance, while on the flip side, 15,500 and 15,400 could be strong support zones for short-term traders. Above 15,750, the index can move to 15.850-15,925. A fresh round of selling is possible if the index slips below 15,400. It can then retest the level of 15,250-15,150.
Prashanth Tapse, Vice President (Research), Mehta Equities | The market can move up for some time, but we suspect — exhaustion will occur and when that happens we will see a major correction. Technically with an inter-week perspective, Nifty’s biggest support is seen at 15363 and below the same, expect a waterfall of selling, while a major hurdle is seen at 15807 and then all eyes will be on the 16157 mark. We suspect Bank Nifty to outperform Nifty in next week’s trade.
Prashanth Tapse, Vice President (Research), Mehta Equities | The market can move up for some time, but we suspect exhaustion will occur and when that happens, we will see a major correction. Technically with an inter-week perspective, the Nifty’s biggest support is at 15,363 and below it expect a waterfall of selling, while a major hurdle is seen at 15,807 and then all eyes will be on the 16,157-mark. We expcet the Bank Nifty to outperform the Nifty in this week’s trade.
Yesha Shah, Head of Equity Research, Samco Securities | The coming week has a host of events arriving which could affect the mood of the market. Globally, investors will keenly analyze the US quarterly GDP growth rate numbers. The USA would officially enter into a recession if they post a negative growth and thus this could have a spill-over effect on global markets. In India, the vehicle sales figures will continue to fuel stock-specific moves on D-Street as investors attempt to decipher the future trend. Moreover, the monthly F&O expiry in the second half of the week may cause volatility in the indices. Investors are thus advised to accumulate good stocks with strong fundamentals, free cash flows, and lower leverage over the long run while disregarding short-term difficulties.
Yesha Shah, Head of Equity Research, Samco Securities | The week has a host of events lined up that can affect the mood of the market. Globally, investors will keenly analyse the US quarterly GDP numbers. The US will officially enter into a recession if it posts negative growth, which could have a spill-over effect on global markets. In India, the vehicle sales figures will continue to fuel stock-specific moves on D-Street as investors will try to decipher the future trend. The monthly F&O expiry in the second half of the week may cause volatility. Investors should accumulate good stocks with strong fundamentals, free cash flows, and lower leverage over the long run while disregarding short-term difficulties.
Ruchit Jain, Lead Research, 5paisa.com | As far as levels are concerned, Nifty ended near its first resistance of 15700 (previous support level), 38.2% retracement of the recent correction is around 15800. ‘20-day EMA’ around 15865 and the 50% retracement which coincides with the gap area is around 16000. So on the way up, the index has a cluster of resistances and hence, it’s better to be very specific on trades. On the flipside, the supports are placed around 15500 and 15360. If the index fails to show strength around any of the above resistances and breaks the supports, then that would indicate resumption of the downtrend and thus one should then change the view accordingly. While this just seems to be a pullback within a downtrend, how much the index retraces will depend on the global markets movement and hence, traders should keep a tab on the same. Also, the intraday volatility in this week was quite high making it difficult for day traders. Such volatility could continue in this pullback and hence, traders should keep a firm check on their money management strategies.
Ruchit Jain, Lead Research, 5paisa.com | As far as levels are concerned, the Nifty ended near its first resistance of 15,700 (previous support level), 38.2% retracement of the recent correction is around 1,5800. The 20-day EMA is around 15,865 and the 50% retracement, which coincides with the gap area, is around 16000. So, on the way up, the index has a cluster of resistances, hence it will be better to be specific on trades. On the flip side, supports are placed around 15,500 and 15,360. If the index fails to show strength around any of the levels and breaks the supports, it will indicate the resumption of the downtrend and one should then change the view accordingly. While this just seems to be a pullback within a downtrend, how much the index retraces will depend on global markets. Also, intraday volatility was quite high in the week gone by, making it difficult for day traders. Such volatility can continue in this pullback, hence traders should keep a firm check on their money management strategies.
Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One | We agree with the fact that we are still not out of the woods yet and till the time Nifty does not surpass its major hurdle of 15900 – 16000 on a closing basis, one should avoid aggressive bets on the long side. Hence, it would be interesting to see how the market behaves in the first half of the forthcoming week. If global relief extends, we may see the Nifty surpassing the 16000 mark and this would certainly trigger a sharp short-covering rally in the market. Before this, 15800 – 15900 – 16000 is to be considered a cluster of resistance. On the flip side, the immediate supports are placed at 15500 – 15350 – 15200. We would also like to highlight one thing, if Nifty manages to close beyond 16100 next week, it will confirm its quarterly close above ‘5-EMA’. The significance of this development is, historically, whenever the benchmark index closed below this key average on the quarterly chart, it triggered a sizeable correction after that. The last time it had happened was in the initial covid fiasco and before that way back in 2011. Hence looking at the broad-based relief this week, we remain hopeful on market obliging to this historical observation.
Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One | We agree with the fact that we are still not out of the woods and till the time Nifty does not surpass its major hurdle of 15,900 – 16,000 on a closing basis, one should avoid aggressive bets on the long side. It will be interesting to see how the market behaves in the first half of the week. If global relief extends, we may see the Nifty surpass the 1,6000-mark and this will certainly trigger a sharp short-covering rally in the market. Before this, 15,800–15,900– 16,000 is to be considered a cluster of resistance. On the flip side, immediate supports are at 15,500–15,350– 15,200. We would also like to highlight one thing, if the Nifty manages to close above 16,100 during the week, it will confirm its quarterly close above ‘5-EMA’. Whenever the benchmark index has closed below this key average on the quarterly chart, it has triggered a sizeable correction. The last time it happened was in the initial days of Covid outbreak and before that, it was in 2011. Hence, looking at the broad-based relief in the week gone by, we remain hopeful on market obliging to this historical observation.
Joseph Thomas, Head of Research, Emkay Wealth Management | The market recorded some recovery in the last couple of days with the moderation in oil prices, and the widespread and deepening fears of a recession. Global economic growth rate is already pitched lower by many international agencies. The interest rate action and liquidity normalization are likely to pull down growth over a period of time, and therefore, the focus on price level may have to be progressively moderated, and this may support the economy in future. This has brought some relief to the markets. But the uncertainties around both price level and growth still continue, as the Fed has already confirmed that the strong rate action will continue. The coming week would also witness some amount of volatility as the sky is still overcast with clouds of uncertainty.
Joseph Thomas, Head of Research, Emkay Wealth Management | The market recorded some recovery in the last couple of days with the moderation in oil prices and deepening fears of a recession. The global economic growth rate is already pitched lower by many international agencies. The interest rate action and liquidity normalisation are likely to pull down growth over a period of time, and therefore, the focus on price level may have to be progressively moderated and this may support the economy in the future. This has brought some relief to the markets. But the uncertainties around both price level and growth still continue, as the US Federal Reserve has already confirmed that the strong rate action will continue. The coming week would also witness some amount of volatility as the sky is still overcast with clouds of uncertainty.
Ajit Mishra, VP - Research, Religare Broking | We expect volatility to remain high next week as well, thanks to the scheduled expiry of June month derivatives contracts. Besides, the performance of the global indices especially the US, crude movement and monsoon progress, etc. will remain on the radar. The next week also marks the beginning of a new month so the auto numbers will also start pouring in from July 1. Markets are taking comfort from their global counterparts but the recent move lacks decisiveness. And, we feel it’s prudent to maintain a cautious stance until we see some concrete reversal signals. Nifty is currently hovering around the resistance zone of 15,700 levels and is likely to face stiff resistance around the 15,900-16,250 zone if the rebound extends further. On the other hand, a breakdown below 15,350 would again change the market tone in the favour of bears. Meanwhile, participants should focus on identifying the opportunities based on the sectoral trend. Auto, FMCG and select pharma counters still look promising to us while metals and PSU banks may continue to face pressure on the rise so align the positions accordingly.
Ajit Mishra, VP- Research, Religare Broking | We expect volatility to remain high this week as well, thanks to the scheduled expiry of June month derivatives contracts. The performance of global indices, especially in the US, the crude movement and the progress of the monsoon will remain on the radar. The week also marks the beginning of a new month, so auto numbers will also start pouring in from July 1. Markets are taking comfort from their global counterparts but the recent move lacks decisiveness. It will be prudent to maintain a cautious stance until we see some concrete reversal signals. The Nifty is hovering around the resistance zone of 15,700 and is likely to face stiff resistance around the 15,900-16,250 if the rebound extends. On the other hand, a slip below 15,350 will again change the market tone in the favour of bears. Participants should focus on identifying opportunities based on the sectoral trend. Auto, FMCG and select pharma counters still look promising, while metals and PSU banks may continue to face pressure on the rise, so align the positions accordingly.
Rakesh Patil
first published: Jun 27, 2022 07:55 am
Sections
ISO 27001 - BSI Assurance Mark