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Market Outlook: Here's what to expect on Dalal Street this week

Market Outlook: Here's what to expect on Dalal Street this week

The domestic equity market settled the volatile week in the red as market participants preferred to stay on the sidelines amid aggressive US Fed tightening and China Covid fear.

Dalal Street this week Dalal Street this week

Benchmark equity indices Sensex and Nifty ended lower on Friday due to fag-end selling in Axis Bank, Reliance Industries and Infosys.

The 30-share BSE benchmark plummeted 460.19 points or 0.80 per cent to end at 57,060.87 despite a firm opening. Nifty tanked 142.50 points or 0.83 per cent to 17,102.55.

The domestic equity market settled the volatile week in the red as market participants preferred to stay on the sidelines amid aggressive US Fed tightening and China Covid fear.

Where is the market headed this week? Who will win? Bulls or Bears? Here's what experts say:

"In the last week and a half, our markets have shown some resilience in comparison with most of the global peers. This is what we have clearly observed where most of the developed markets have corrected nearly 5 - 7% and we remained in merely a 2 - 3% band all this while. This is an indication of the inherent strength and hence, the moment we see some relief globally, our markets would be the first ones to take a leap," said Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One Ltd.

"We continue to remain hopeful as long as 16900 – 16800 are defended successfully. Now with the last two weeks of range-bound movement, the daily time frame chart exhibits a ‘Triangle’ pattern and prices are inching closer to their apex point. Hence, the breakout in either direction is imminent. As of now, we expect it to happen in the northward direction where 17400 – 17450 are the levels to watch out for," he said.

"The moment we surpass this, we could see a lot of individual stocks participating in the next leg of the rally.  This view would be negated if the index slides and sustains below the lower range," he added.

Vinod Nair, head of research, Geojit Financial Services said, "A shrink in the US economy and rate hike expectations in the upcoming Fed meet triggered sell-off in the global market. Domestic market reduced exposure ahead of the shortened next week and opening of India's largest IPO of Life Insurance Corporation."

Sharing the technical view, Yesha Shah, Head of Equity Research, Samco Securities said, "Nifty 50 has been consolidating for two weeks in the range of 16,900 to 17,350. A crucial support zone has been established around 16,800 levels and the benchmark has managed to bounce back multiple times from this level."

"On the weekly chart, while Nifty formed a doji candlestick pattern last week, an inverted hammer has been formed this week. This is a bullish indication as the pattern suggests that a bottom is likely to be in place and we may see a trend reversal going forward. Therefore, we recommend that traders maintain a bullish stance on the index for the next couple of weeks with a target of 18,000," Shah added.

Sumeet Bagadia, Executive Director, Choice Broking said, "Technically, the nifty index has slipped from Middle Bollinger Band formation & moved below 21 days EMA that suggest bearishness for the coming day. Moreover, the index has also formed a Bearish Engulfing candlestick pattern on the daily chart, which is a bearish indication for the near term."

"However, the index is still taking support at 50-SMA and an indicator Stochastic is hovering near the oversold zone. At present, the index is having support at 16950 levels while resistance is placed at 17300 levels. On the other hand, Bank nifty has support at 35700 levels while resistance at 36500 levels," he added.

"On technical front, Nifty50 may take support at 16,950 levels and may face resistance at 17,400 levels. In case of Bank Nifty immediate support and resistance levels are 35,700 and 36,600 level respectively," said Mohit Nigam, Head - PMS, Hem Securities.

Also read: Nasdaq records worst month since 2008 as tech stocks sink again

Published on: May 02, 2022, 7:14 AM IST
Posted by: anwesha madhukalya, May 02, 2022, 7:08 AM IST