Consolidation may continue amid RBI policy, earnings; 17,400 a key support In the coming week, RBI’s policy meeting will be the major event awaited by the domestic investors. RBI may begin its policy tapering with an increase in reverse repo rate keeping repo rates unchanged, says Vinod Nair, Head of Research at Geojit Financial Services.
February 07, 2022 / 07:38 AM IST
In the Budget week, the market broke its two-week losing streak and ended with over 2 percent gain amid volatility. BSE Sensex added 1,444.59 points (2.52 percent) to end at 58,644.82, while the Nifty50 rose 414.35 points (2.42 percent) to close at 17,516.3 levels.
Amol Athawale, Deputy Vice President - Technical Research, Kotak Securities | On weekly charts, the index has formed an upper shadow bullish candle, which indicates indecisiveness between bulls and bears. However, on daily and intraday charts, the market is consistently forming higher bottom formation which supports the uptrend. For the traders, 17400-17350 would be the sacrosanct support level. Above which the index could continue the up move till 17700-17850 levels. On the flip side, below 17350, the uptrend would be vulnerable and could trigger a short term weakness up to 17200-17150.
Sachin Gupta, AVP-Research at Choice Broking | On the technical front, the index has slipped below the prior bearish candlestick on the daily time frame, which points out the weakness in the counter for the time being. Moreover, the index has also traded below Middle Bollinger Band formation and 21-days SMA, which indicates further bearishness for the coming day. On an hourly chart the index has shifted below the Rising Trendline, which suggests a weakness. An indicator Stochastic witnessed a negative crossover on a daily scale. At present, the Index has support at 17400/17250 levels while resistance comes at 17800 levels. On the other hand, Bank nifty has support at 38300 levels while resistance at 39200 levels.
Rupak De, Senior Technical Analyst at LKP Securities | The consolidation may continue in the short term as long as Nifty remains with the bands of 17400 and 17800. Any directional breakout in the near term may induce further significant move in the market.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments | On the upside the Nifty needs to conquer 17800 for a clear bull rally to take off. On the downside 17200 needs to break on a closing basis for the trend to turn bearish. Until one of the two levels is not taken out, the market will remain volatile.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas | The Nifty attempted a bounce in the week gone by however faced resistance near the 20 DMA & 61.8% retracement of the Jan decline i.e. near 17770. Thereon it has stepped into a consolidation mode. On the way down it has broken the key hourly & the daily moving averages as well as broken down from a rising channel on the hourly chart. Going ahead, 17400 is a key support to watch out for below which the index can test 17200 in the short term. On the other hand, 17800 will act as the upper end of the short term consolidation range.
Ajit Mishra, VP - Research, Religare Broking | On the domestic front, markets will first react to SBI numbers on Monday and the upcoming RBI monetary policy review will also be on the radar. Their commentary on inflation and economic growth will be key factors to watch amid the hawkish stance from the US Fed. In our opinion, while the benchmark might consolidate further, volatility on the broader front would be hard to handle. We thus recommend maintaining a cautious stance and keeping a check on leveraged positions.
Yesha Shah, Head of Equity Research, Samco Securities | The MPC meeting of the RBI will be a key event for the markets to watch. Unlike its global peers, RBI has been behind the curve and has been downplaying inflation risks. With increased government borrowing announced in the budget, rising global inflation, and a lag in private consumption and investment, D-Street will keep a close eye on the future outlook of monetary policy. On the global front, markets continue to remain choppy, and investors will be looking for clues from US inflation data to help them determine their next move. In the midst of rising volatility, investors can continue to accumulate quality stocks in a SIP format.
Ruchit Jain, Lead Research, 5paisa.com | From a near term perspective, the supports for this corrective leg are seen around 17430 and 17315. On the flipside, 17800 would be the pivotal point above which the index would resume its broader uptrend. In the options segment too, 17800 call option has the highest open interest buildup which indicates its importance in the near term. FII’s have been sellers in the index futures segment with net position on the short side which remains a concern. For a resumption of the broader uptrend, the participation from these stronger hands is required and hence, one should keep a close watch on their positions. For the coming week, traders are advised to be very stock specific and look for themes which are outperforming the benchmark indices.
Vinod Nair, Head of Research at Geojit Financial Services | In the coming week, RBI’s policy meeting will be the major event awaited by the domestic investors. RBI may begin its policy tapering with an increase in reverse repo rate keeping repo rates unchanged.
Vishal Wagh, Research Head, Bonanza Portfolio | Going ahead in short term, 17,800 will hold the key which was this week's high. The index will have to sustain above this price to test 18,000 & 18,350 levels again. The structure indicates that a symmetrical triangle is in the making on weekly charts and a breakout above 18,350 levels will mean that the index is set to make new highs whereas on the downside a close below 17,000 will mean bears will be in control.