Volatility likely to remain high amid ongoing Russia-Ukraine conflict; GDP, auto numbers in focus
In the coming week, the prevailing Russian-Ukraine crisis will remain in focus. Besides, on the domestic front, important macroeconomic data viz. GDP numbers and Infrastructure output data are scheduled for Feb 28
In the week ended February 25, the Indian market tumbled more than 3 percent, falling for the third straight week. The escalation in geopolitical tensions between Russia and Ukraine led to risk aversion among investors and sent the commodities soaring. On Friday, bulls made a comeback after a kneejerk crash on Thursday. On Friday, investors managed to reverse half of the losses made on Thursday. In the week gone by, BSE Sensex shed 1,974.45 points (3.41 percent) to end at 55,858.52, while the Nifty50 declined 617.9 points (3.57 percent) to close at 16,658.40 levels. Here's what experts say we should expect on the Street this week:
2/14
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities | With earnings season behind us and given the overall sentiments, markets are expected to move in sync with global peers in the coming week. A close eye will be kept on the developments concerning the Russia – Ukraine crisis and considering the inflation overhang, market participants will also observe movements in energy prices.
3/14
Rahul Sharma of Equity 99 | Investors are advised to maintain adequate liquidity to take advantage of any big fall in market and buy quality stocks on major falls. For Nifty50 16580 will act as very strong support level. If this level is breached intraday than next support will be around 16430 levels, post which markets might take support at 16350 levels. On upper side 16740 will act as strong hurdle rate, if this level is breached than next resistance will be around 16850 levels post which we might see 17000 levels.
4/14
Amol Athawale, Deputy Vice President - Technical Research, Kotak Securities | It would be interesting to see whether the index holds the level of 16500 or not. However, if the index manages to trade above 16500, a pullback formation is likely to continue till 16900-17000. However, a strong possibility of one more short term correction is not ruled out, if the index closes below 16500. Below the same, there are chances that the Nifty could hit 16300-16100 levels.
5/14
Palak Kothari, Research Associate at Choice Broking | Technically, the Nifty50 is trading below its prior support of 16800 levels & 200-days Simple Moving Averages indicates further weakness. However, the momentum indicator STOCHASTIC in trading with positive crossover on daily charts which indicates upside movement can be seen. Moreover, the index has managed to close above 9-HMA sustained above the same can show northward direction. Further any positive trigger from the geopolitical tensions can ease the selling pressure. The Nifty may find support around 16200/16000 levels while on the upside 16800 may act as an immediate hurdle for the index. On the other hand, Bank Nifty has support at 35800 levels, while resistance at 37000 levels.
6/14
Yesha Shah, Head of Equity Research, Samco Securities | Prevalent geopolitical tensions will continue to take centre stage and will be a primary driver directing market direction and investor mood internationally. If the current state of conflict between Russia and Ukraine continues, markets may sink even further into the red sea. In addition, the domestic economic calendar will have an impact on D-Street, as quarterly GDP results, auto sales figures, and manufacturing PMI readings are all due in the next week. Given the various trigger points and growing uncertainty, investors are recommended to exercise extreme prudence in the short term and avoid any aggressive trades.
7/14
Anu Jain, Head – Broking, IIFL Wealth | In the short-term we expect Index prices to remain volatile with Thursday’s low (16203) as an important level to watch. Prices have given a negative confirmation with a break below the multiple support zone of 16800-16900 coinciding with the 200-day Moving average which on the upside could act as immediate resistance. In the short-term sustainability below 16400 would indicate weakness for 15900 levels & broad range for the market could be 15800-17050 levels. Global Markets have retraced back to important support levels and a temporary pullback and consolidation remains a probable scenario.
8/14
Vinod Nair, Head of Research at Geojit Financial Services | Going ahead investors will continue to remain cautious by keenly watching the developments in the Russia-Ukraine war. In such a volatile market a prudent approach is to have a balanced portfolio with a mix of equity, debt, gold, and cash. It is also a busy week in terms of the release of macroeconomic data points like domestic GDP and Manufacturing & Production PMI data.
9/14
Ruchit Jain, Lead Research, 5paisa.com | Although we have seen a sharp recovery from lows, we may not be out of the woods yet as the previous support zone of 16800-16850 will now be seen as hurdle on pullback. Also, the index has given a breakdown from a ‘Descending Triangle’ pattern during the week and thus, Friday’s move could just be a pullback to test the neckline which was breached. In a nutshell, the bulls need to reclaim 16850 and sustain above that to negate the corrective trend and until then, one should avoid aggressive positions in the market. On the flipside, 16480 followed by 16200 would be seen as immediate short term supports for Nifty. India VIX, which spiked towards 34 on the expiry day cooled off on Friday which is a good sign. The rollovers in derivatives segment were also lower than the average and hence, how traders form fresh positions in the initial week of the March series will also be an important factor to see in the coming week.
10/14
Harsh Parekh, Technical Analyst, Bonanza Portfolio | On the daily charts, Nifty is trading below its 200-Day EMA which is placed at 16,680 which should act as an important level. Moreover, the structure of the index has turned negative and has been giving signs since the last many trading sessions with the downward sloping trendline acting as good resistance. Going ahead 16850 should be taken out on a closing basis for more possible upside till 17000 levels. On the downside, if the index starts trading below 16400 levels we may revisit 16200 levels and even further to 16,000.
11/14
Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One | Taking a glance at the daily time frame chart, we can clearly see Nifty breaking below the sacrosanct moving average of ‘200-SMA’ placed around 16900. Since this has happened with a ‘Breakaway Gap’, traders would continue to have challenging times till the time we do not reclaim 16800 – 17000 with some authority. This is possible in the near term only if tensions eases off with respect to Russia and Ukraine. Till the time this does not happen, we are not completely out of the woods. On the flipside, 16400 followed by 16200 are to be seen as immediate supports but if things worsen from here, we will not be surprised to see Nifty sliding below 16000 as well. Let’s see how things pan out going ahead and since the volatility is likely to remain on the higher side, traders are advised not to get carried away by one day bounce. Rather it’s advisable to keep a regular tab on all these developments and better to stay light on positions. Whether market extends the correction in sub-16000 terrain or not, the time will tell; but in case if it happens, it would certainly be an excellent opportunity for investors to accumulate quality propositions in a staggered manner.
12/14
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas | The level of 16800 was earlier acting as a crucial support & has now changed its role to that of a resistance. Unless that level gets taken out on a closing basis the index can witness a consolidation in the range of 16200-16800. On the other hand, if 16800 is crossed on a closing basis then the index can attempt a larger bounce towards 17200-17300.
13/14
Ajit Mishra, VP Research. Religare Broking | In the coming week, the prevailing Russian-Ukraine crisis will remain in focus. Besides, on the domestic front, important macroeconomic data viz. GDP numbers and Infrastructure output data are scheduled for Feb 28. With the beginning of the new month, the auto sales data will also start pouring in from March 1. Markets have finally ended the 4-month long consolidation phase and look structurally weak now. On the index front, Nifty has the next major support around 15,900-16,000 zone. To negate the view, it should reclaim the 17,000 zones decisively and the next major hurdle would be around the 17,300 zones. The prevailing volatility is hard to trade, we thus suggest traders limit positions and wait for some stability. Investors, on the other hand, should use this phase to accumulate quality stocks on dips.
14/14
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services | While markets have seen a pullback – volatility is expected to remain high over the next few days. Market will be keeping a close watch on the ongoing Russia Ukraine conflict over the weekend for any further cues. For the near term, Thursday’s low of 16200 may act as a strong support. While traders need to remain cautious of sharp volatility, Investors can use the current dip to gradually add quality blue chip companies in their portfolios.
