10 April,2017 04:25 AM IST | | Alex k Mathews
Nifty made an intraday high at 9270, last week and finally settled at 9198.30. On Friday, the Sensex closed a little below at 30,000. Still, both these markets are in the buy mode. Nifty has major support at 9116.87
Protests at US air strikes against Syria in Los Angeles. It has fuelled calls for a diplomatic push to end the six-year war. Pic/AFP
Nifty made an intraday high at 9270, last week and finally settled at 9198.30. On Friday, the Sensex closed a little below at 30,000. Still, both these markets are in the buy mode. Nifty has major support at 9116.87. If Nifty closes below this level consecutively for more than two days, then we can see more selling pressure which can bring down below 9000 levels. Chances of that are low because the India VIX is still below 12 indicating strong support for the market at lower levels. Nifty has resistances at 9264, 9270 and 9400. Sustained FII buying and short covering can take Nifty towards these levels.
Watching the world
Last week, the Reserve Bank of India (RBI) kept the Repo rate unchanged at 6.25 per cent, but raised the Reverse Repo Rate to 6 per cent. This move by RBI will prompt banks to keep more money with the central bank; in another words this move will suck excess liquidity from the banking system.
The latest move by the US to attack Syria means it is extremely important to keep an eye on geo-political tensions. If the situation escalates, then we can expect further sell-off by the institutional investors from the emerging markets. Quarterly earnings season has already started in India, which will give further direction towards the markets in the days to come. Infosys result will come out on April 13, which will give direction to the IT stocks future, especially the large cap stocks.
The US core inflation rate on a Month on Month basis, Retail Sales and EIA crude oil stock change datas are due next week from the US. Balance of Trade, Industrial Production and Inflation rates are expected from Euro Zone and Industrial Production, Inflation Year on Year, Manufacturing Production and Balance of trade from India, is also very crucial macro data, which can affect the market sentiments in this week.
Nifty bank, like Nifty is yet to give a major sell-off and it has support at 21380. Many private sector banking stocks made new 52-week highs in the recent past, and. will keep these stocks upward momentum in the coming days too. Public sector banking stocks will remain lacklustre for the time being. Nifty bank has resistance at 21678.
Nifty energy stocks will be in focus, Nifty energy has support at 11943.70 and resistances at 12240. Counters like oil producers and OMC are likely to gain further in the days to come.
Stock talk
Like the Energy sector, metals stocks will also be in focus. Selected metal counters are likely to get lower level support. Nifty metal Index has supports at 3091 and 3049 and it has resistance 3164.
Pharma sector stocks were underperforming last week, the major trend is still bearish but the daily charts are entered in the oversold territory and can cause high volatility in this sector. Higher level selling is advisable at the major counters.
Dow Jones is on a corrective mode with strong support at 20656, lower level support can emerge in the days to come. If the tension between US and Russia does not escalate, then we can see sharp recovery in US markets. Dow Jones has resistances at 20746 and 21118.56.
Alex K Mathews is the founder of www.thedailybrunch.com
