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Pullback likely to continue amid macro data, auto sales, monsoon updates: Experts

Nifty has seen good recovery from lows of 15,800 levels. However, it needs to surpass previous hurdles at around 16,400 zones, above which we can see a fresh rally in markets, says Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services.

May 30, 2022 / 07:06 AM IST
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Indian markets ended higher for the second consecutive week ended May 27 amid volatility. In the last week, the BSE Sensex rose 558.27 points (1.02 percent) to close at 54,884.66, while the Nifty50 gained 86.35 points (0.53 percent) to end at 16,352.5 levels.
Ajit Mishra, VP - Research, Religare Broking | The coming week marks the beginning of the new month also and participants will be closely eyeing important high-frequency data like auto sales, manufacturing and services PMI data during the week. Before that, quarterly GDP data, which is scheduled on May 31, will be in focus. Apart from these important data, updates on monsoon progression will remain on their radar. In the last leg of earnings, companies like Aurobindo Pharma, Jindal Steel and Sunpharma will announce their numbers along with several others. The recent rebound in the US markets has eased some pressure however sustainability is critical for forming a base and attempting a reversal. And since we’re closely aligned at present, it could help the Nifty to surpass the hurdle at 16,400 and march towards the 16,700-16,800 zone. In case of a failure, traders should brace themselves for a volatile week. Meanwhile, they should opt for stock-specific trading approach and prefer auto, banking mainly private, financials, and FMCG pack for identifying long trades. On the other hand, energy, metals and PSU banks may continue to trade subdued.
Ajit Mishra, VP - Research, Religare Broking | The coming week marks the beginning of the new month also and participants will be closely eyeing important high-frequency data like auto sales, manufacturing and services PMI data during the week. Before that, quarterly GDP data, which is scheduled on May 31, will be in focus. Apart from these important data, updates on monsoon progression will remain on their radar. In the last leg of earnings, companies like Aurobindo Pharma, Jindal Steel and Sunpharma will announce their numbers along with several others. The recent rebound in the US markets has eased some pressure however sustainability is critical for forming a base and attempting a reversal. And since we’re closely aligned at present, it could help the Nifty to surpass the hurdle at 16,400 and march towards the 16,700-16,800 zone. In case of a failure, traders should brace themselves for a volatile week. 
Amol Athawale, Deputy Vice President - Technical Research, Kotak Securities | We are of the view that, the short term texture of the market has changed to positive from negative. For the trend following traders now, 16200/54450 would be the key level to watch out. Above which, it could touch the level of 16500-16650. /55300-55500. On the flip side, below 16200/54450 uptrends would be vulnerable. Below the same, the index could retest the level of 16000/53900. Further down side may also continue which could drag the index up to 15900-15850/53600-53500.
Amol Athawale, Deputy Vice President - Technical Research, Kotak Securities | We are of the view that the short-term texture of the market has changed to positive from negative. For the trend following traders now, 16200/54450 would be the key level to watch out. Above which, it could touch the level of 16500-16650 /55300-55500. On the flip side, below 16200/54450 uptrends would be vulnerable. Below the same, the index could retest the level of 16000/53900. Further down side may also continue which could drag the index up to 15900-15850/53600-53500.
Yesha Shah, Head of Equity Research, Samco Securities | The manufacturing PMI figures for China and the consumer confidence index for the USA will impact global markets next week. In India, amidst global recessionary worries, data on Indian GDP growth for the fourth quarter of FY22 is eagerly awaited. Due to commodity price increases, a fall in wheat yields, and pressure last quarter on contact-intensive services, GDP growth is largely predicted to be lower than in the previous quarter. Sentiments may worsen if growth falls short of predictions. Apart from the GDP print, the monthly sales of the auto companies will also be in the limelight. Given the series of data releases, the coming week will undoubtedly be eventful, and investors are recommended to exercise caution in their trading decisions.
Yesha Shah, Head of Equity Research, Samco Securities | The manufacturing PMI figures for China and the consumer confidence index for the USA will impact global markets next week. In India, amid global recessionary worries, data on Indian GDP growth for the fourth quarter of FY22 is eagerly awaited. Due to commodity price increases, a fall in wheat yields, and pressure last quarter on contact-intensive services, GDP growth is largely predicted to be lower than in the previous quarter. Sentiments may worsen if growth falls short of predictions. Apart from the GDP print, the monthly sales of the auto companies will also be in the limelight. Given the series of data releases, the coming week will undoubtedly be eventful, and investors are recommended to exercise caution in their trading decisions.
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services | Nifty has seen good recovery from lows of 15,800 levels. However, it needs to surpass previous hurdles at around 16,400 zones, above which we can see a fresh rally in markets. Investors will take cues monthly macro data that will be released next week globally as well as domestically.
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services | The Nifty has seen good recovery from the lows of 15,800 levels. However, it needs to surpass previous hurdles at around 16,400 zones, above which we can see a fresh rally in markets. Investors will take cues monthly macro data that will be released next week globally as well as domestically.
Manish Shah, SEBI Registered Investment Advisor | Nifty needs to move above 16400 if the rally has to continue. The sideways action in last two weeks has resulted in Nifty showing an ascending triangle. A break out from 16400 will mean a significant development for the market; opening a gateway to 16800-16900. We are possibly looking at a major low in Nifty.
Manish Shah, SEBI Registered Investment Advisor | The Nifty needs to move above 16400 if the rally has to continue. The sideways action in last two weeks has resulted in Nifty showing an ascending triangle. A break out from 16400 will mean a significant development for the market; opening a gateway to 16800-16900. We are possibly looking at a major low in Nifty.
Ruchit Jain, Lead Research, 5paisa.com | Looking at the other sectoral indices, we expect the index to continue its pullback in the coming week as well and thus we could see some larger retracement of the previous correction. The initial retracement resistance will be seen around 16550 which we expect to get tested soon. Above that, the 61.8% retracement which coincides with 200-DEMA is around 16750. On the flipside, 16200 followed by 15900 will now act as support on any declines. Traders are advised to trade with a positive bias for the coming week and look for stock specific approaches where we could see good opportunities.
Ruchit Jain, Lead Research, 5paisa.com | Looking at the other sectoral indices, we expect the index to continue its pullback in the coming week as well and thus we could see some larger retracement of the previous correction. The initial retracement resistance will be seen around 16550 which we expect to get tested soon. Above that, the 61.8 percent retracement which coincides with 200-DEMA is around 16750. On the flipside, 16200 followed by 15900 will now act as support on any declines. Traders are advised to trade with a positive bias for the coming week and look for stock specific approaches where we could see good opportunities.
Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One | We are back to the higher end of the recent range i.e., 16400 and it would be interesting to see whether Nifty surpasses it or not. In our sense, it’s a matter of time and we would see Nifty traversing this level to test 16600 – 16800 in the coming week. Despite all this, we are still not completely out of the woods yet, because globally there is yet to stabilize things. Hence, we advise traders not to get complacent and should keep assessing the situation on a regular basis. As far as immediate support is concerned, 16200 followed by 16000 should provide cushion on any intra-week weakness. Hopefully, global markets come out of the challenging phase soon, which will attract strong buying in our markets going ahead.
Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One | We are back to the higher end of the recent range i.e., 16400 and it would be interesting to see whether Nifty surpasses it or not. In our sense, it’s a matter of time and we would see the Nifty traversing this level to test 16600 – 16800 in the coming week. Despite all this, we are not completely out of the woods yet because a lot of issues are yet to be stabilised. Hence, we advise traders to not get complacent and should keep assessing the situation on a regular basis. As far as immediate support is concerned, 16200 followed by 16000 should provide cushion on any intra-week weakness. Hopefully, global markets come out of the challenging phase soon, which will attract strong buying in our markets going ahead.
Rakesh Patil
first published: May 30, 2022 07:06 am
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