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Market to remain highly volatile on FOMC meet expectations, F&O expiry and earnings

In the coming week, the domestic market is expected to remain highly volatile with investors awaiting the outcome of the upcoming budget announcement, says Vinod Nair, Head of Research at Geojit Financial Services.

January 24, 2022 / 09:32 AM IST
Indian benchmark indices remained under selling pressure for the week ended January 21 in-line with weak global markets. In the past week, the BSE Sensex shed 2,185.85 points (3.57 percent) to end at 59,037.18, while the Nifty50 fell 638.55 points (3.49 percent) to close at 17,617.2 levels. Among sectors, BSE Information Technology index lost 6.5 percent, BSE Telecom index fell 5.8 percent and Nifty Pharma index shed 5.2 percent. However, the BSE Power index added 2.6 percent.
Indian benchmark indices remained under selling pressure for the week ended January 21 in-line with weak global markets. In the past week, the BSE Sensex shed 2,185.85 points (3.57 percent) to end at 59,037.18, while the Nifty50 fell 638.55 points (3.49 percent) to close at 17,617.2 levels. Among sectors, BSE Information Technology index lost 6.5 percent, BSE Telecom index fell 5.8 percent and Nifty Pharma index shed 5.2 percent. However, the BSE Power index added 2.6 percent.
Ruchit Jain, Lead Research, 5paisa.com | For the coming week, 17500 will now be seen as the important support while a move above 17700 could again lead to a buying interest amongst market participants and take the index towards 17900-18000. In our view, last week’s correction is just a short term corrective phase and our markets should now resume the uptrend to mark a pre-budget rally. The banking index has relatively done better than the Nifty last week and the broader charts of Bank Nifty indicate an impulsive up move. Thus, banking space could dictate and lead the next leg of the up move and hence, traders should keep a close tab on momentum in heavyweights from this sector.
Ruchit Jain, Lead Research, 5paisa.com | For the coming week, 17500 will now be seen as the important support while a move above 17700 could again lead to a buying interest amongst market participants and take the index towards 17900-18000. In our view, last week’s correction is just a short term corrective phase and our markets should now resume the uptrend to mark a pre-budget rally. The banking index has relatively done better than the Nifty last week and the broader charts of Bank Nifty indicate an impulsive up move. Thus, banking space could dictate and lead the next leg of the up move and hence, traders should keep a close tab on momentum in heavyweights from this sector.
Vishal Wagh, Research Head, Bonanza Portfolio | Going ahead, the index has to close above 18,000 to continue its upward trajectory and on the downside, now 17,500 should act as good support where a minor pullback was visible in today's session. Along with global disturbances, the uncertainties regarding the upcoming Budget will likely keep the domestic market highly volatile in the coming days. Markets will react to the earnings of two heavyweights- Reliance Industries and ICICI Bank in early trade on Monday.
Vishal Wagh, Research Head, Bonanza Portfolio | Going ahead, the index has to close above 18,000 to continue its upward trajectory and on the downside, now 17,500 should act as good support where a minor pullback was visible in today's session. Along with global disturbances, the uncertainties regarding the upcoming Budget will likely keep the domestic market highly volatile in the coming days. Markets will react to the earnings of two heavyweights- Reliance Industries and ICICI Bank in early trade on Monday.
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services | Nifty has corrected almost 750 points from its recent peak. Technically, Nifty is closer to its 50 EMA of 17600 on a daily timeframe. Below this level, the weakness in Nifty might continue in the near term. Globally induced volatility, mixed set of results and heavy FII selling have added pressure in the market. Results from heavyweight Reliance Industries and ICICI Bank over the weekend would provide market direction on Monday.
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services | Nifty has corrected almost 750 points from its recent peak. Technically, Nifty is closer to its 50 EMA of 17600 on a daily timeframe. Below this level, the weakness in Nifty might continue in the near term. Globally induced volatility, mixed set of results and heavy FII selling have added pressure in the market. Results from heavyweight Reliance Industries and ICICI Bank over the weekend would provide market direction on Monday.
Amol Athawale, Deputy Vice President - Technical Research, Kotak Securities | On weekly charts the Nifty has formed a long bearish bar reversal candle which indicates short term weakness going ahead. Also, the index closing below the 20-day SMA is broadly negative. For the bulls the 50-day SMA or 17500 would act as a sacrosanct support level. Above the same, a pullback rally could be seen which could take the index up to 17775 and may rise further to 17900-17950 levels on further upside. On the flip side, a close below 50-day SMA could trigger further weakness up to 17400-17300.
Amol Athawale, Deputy Vice President - Technical Research, Kotak Securities | On weekly charts the Nifty has formed a long bearish bar reversal candle which indicates short term weakness going ahead. Also, the index closing below the 20-day SMA is broadly negative. For the bulls the 50-day SMA or 17500 would act as a sacrosanct support level. Above the same, a pullback rally could be seen which could take the index up to 17775 and may rise further to 17900-17950 levels on further upside. On the flip side, a close below 50-day SMA could trigger further weakness up to 17400-17300.
Ajit Mishra, VP Research. Religare Broking | The coming week is a holiday-shortened one and it’s going to be critical due to the list of events and data which are lined up. First, markets will react to the earnings of two index heavyweights- Reliance Industries and ICICI Bank. Currently, the uncertainty around the quantum of a rate hike by the US Fed is spooking markets the world over and participants expect clarity in the scheduled FOMC meeting outcome on January 26. Amid all, the monthly expiry of the January month derivatives contract would keep the traders on their toes. In the run-up to the budget, sector-specific expectations would further add to the choppiness. Markets are facing global headwinds and expect choppiness to remain high in the coming week as well. On the index front, the 17600-17350 zone would be critical to hold for any meaningful recovery. Since the selling pressure is widespread and volatility is further adding to the difficulties, it’s prudent to restrict naked leveraged positions and prefer hedged trades.
Ajit Mishra, VP Research. Religare Broking | The coming week is a holiday-shortened one and it’s going to be critical due to the list of events and data which are lined up. First, markets will react to the earnings of two index heavyweights- Reliance Industries and ICICI Bank. Currently, the uncertainty around the quantum of a rate hike by the US Fed is spooking markets the world over and participants expect clarity in the scheduled FOMC meeting outcome on January 26. Amid all, the monthly expiry of the January month derivatives contract would keep the traders on their toes. In the run-up to the budget, sector-specific expectations would further add to the choppiness. Markets are facing global headwinds and expect choppiness to remain high in the coming week as well. On the index front, the 17600-17350 zone would be critical to hold for any meaningful recovery. Since the selling pressure is widespread and volatility is further adding to the difficulties, it’s prudent to restrict naked leveraged positions and prefer hedged trades.
Vinod Nair, Head of Research at Geojit Financial Services | In the coming week, the domestic market is expected to remain highly volatile with investors awaiting the outcome of the upcoming budget announcement. As the recent earnings failed to excite the market, the earnings outcomes in the coming week will be a key factor in determining investor confidence.
Vinod Nair, Head of Research at Geojit Financial Services | In the coming week, the domestic market is expected to remain highly volatile with investors awaiting the outcome of the upcoming budget announcement. As the recent earnings failed to excite the market, the earnings outcomes in the coming week will be a key factor in determining investor confidence.
Yesha Shah, Head of Equity Research, Samco Securities | Nifty50 index closed sharply negative for the week. However, the benchmark index seems to be finding a cushion around the 17,500 zone. On the daily time frame, it has formed a hammer kind of candlestick pattern around the previous resistance zone. The BankNifty index as well has formed a similar pattern around the 20-day moving average. This pattern indicates a continuation of the ongoing major uptrend. Having said this, if Nifty fails to hold above the 17,500 support zone, then an extension of time and price correction is likely. Therefore, traders should maintain a cautious to mild bullish outlook.
Yesha Shah, Head of Equity Research, Samco Securities | Nifty50 index closed sharply negative for the week. However, the benchmark index seems to be finding a cushion around the 17,500 zone. On the daily time frame, it has formed a hammer kind of candlestick pattern around the previous resistance zone. The BankNifty index as well has formed a similar pattern around the 20-day moving average. This pattern indicates a continuation of the ongoing major uptrend. Having said this, if Nifty fails to hold above the 17,500 support zone, then an extension of time and price correction is likely. Therefore, traders should maintain a cautious to mild bullish outlook.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas | The Nifty breached the 38.2% retracement of Dec – Jan rally on an intraday basis however received strong support as it approached 17500. Thus it managed to hold on to the key Fibonacci level, which is at 17610, on a closing basis. The hourly momentum indicator got pushed into the oversold zone where it has developed positive divergence & is looking for a recovery. All these observations show that the index is in the far end of the short term correction & can attempt a bounce back. On the higher side, 17700-17800 is an immediate resistance zone. Once that is crossed, the index can test 18000 on the upside. On the flip side, immediate support zone is placed at 17600-17500.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas | The Nifty breached the 38.2% retracement of Dec – Jan rally on an intraday basis however received strong support as it approached 17500. Thus it managed to hold on to the key Fibonacci level, which is at 17610, on a closing basis. The hourly momentum indicator got pushed into the oversold zone where it has developed positive divergence & is looking for a recovery. All these observations show that the index is in the far end of the short term correction & can attempt a bounce back. On the higher side, 17700-17800 is an immediate resistance zone. Once that is crossed, the index can test 18000 on the upside. On the flip side, immediate support zone is placed at 17600-17500.
Rahul Sharma, co-owner, Equity 99 | Investors are advised to keep strict stop loss to their position and trade with small quantities as market continues to remain volatile in pre budget days. Important events for next week – Finance sector will be in focus as US will be conducting its 52-week bill auction on Tuesday. Manufacturing industry will be in focus as US will be declaring its Goods trade Balance on Thursday. For Nifty 17570 will act as very strong support post which next support is at 17500 levels. On upper side 17700 will act as very strong resistance, post which 17805 will be next hurdle rate. Once this level is broken, then the next resistance will be around 17920 levels.
Rahul Sharma, co-owner, Equity 99 | Investors are advised to keep strict stop loss to their position and trade with small quantities as market continues to remain volatile in pre budget days. Important events for next week – Finance sector will be in focus as US will be conducting its 52-week bill auction on Tuesday. Manufacturing industry will be in focus as US will be declaring its Goods trade Balance on Thursday. For Nifty 17570 will act as very strong support post which next support is at 17500 levels. On upper side 17700 will act as very strong resistance, post which 17805 will be next hurdle rate. Once this level is broken, then the next resistance will be around 17920 levels.
Palak Kothari, Research Associate at Choice Broking | On the technical front, the index has formed bearish engulfing on a weekly time frame which points to weakness in the counter. Furthermore, the index has given closing below 38.2% RL of a previous up rally which suggests further downside can be seen. Moreover, the index has been trading below 21 & 50-HMA with a negative crossover as well as a momentum indicator MACD & STOCHASTIC are trading with a negative crossover on the daily time-frame which suggests weakness in the counter. At present, the index has support at 17450 levels, breaching below it can show 17350-17300 levels while resistance comes at 17800 levels. On the other hand, Bank Nifty has support at 37000 levels while resistance at 38000 levels.
Palak Kothari, Research Associate at Choice Broking | On the technical front, the index has formed bearish engulfing on a weekly time frame which points to weakness in the counter. Furthermore, the index has given closing below 38.2% RL of a previous up rally which suggests further downside can be seen. Moreover, the index has been trading below 21 & 50-HMA with a negative crossover as well as a momentum indicator MACD & STOCHASTIC are trading with a negative crossover on the daily time-frame which suggests weakness in the counter. At present, the index has support at 17450 levels, breaching below it can show 17350-17300 levels while resistance comes at 17800 levels. On the other hand, Bank Nifty has support at 37000 levels while resistance at 38000 levels.
Rakesh Patil
first published: Jan 24, 2022 09:32 am
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