Bulls will look for a relief rally amid selling exhaustion at lower levels

Bulls will look for a relief rally amid selling exhaustion at lower levels

Market


Nifty week ahead: The market remained resilient despite lots of headwinds where headline indices Nifty and Sensex managed to close with gain for the second straight week. There is selling exhaustion at lower levels as the market is bouncing back from every intraday dip amid lots of headwinds like a fall in global markets, rupee weakness, and a windfall tax on domestic refineries companies. FIIs are still selling but the momentum has come down significantly, therefore, bulls will look for a relief rally if global markets remain stable. Amid all crude oil prices, the dollar index and rupee movement will other dominating factors.

Technically, Nifty is respecting the 15700-15500 zone beautifully however 20-DMA is acting as a strong hurdle in the upside which is currently placed at 15827 level; above this, we can expect a short-covering rally towards 16050/16200 levels. The bulls will have the upper hand till the Nifty trades above the 15500 level while below 15500, the weakness may again resume towards 15350/15180 levels.

Bank Nifty is respecting 33000 level however 20-DMA is acting as a strong hurdle which is currently placed at 33700 level; above this, we can expect a short-covering rally towards 34150/34500 levels while if it slips below 33000 level then 32500 is the next critical support level.

If we talk about the derivative data then the long exposure of FIIs in the index future stands at 16% and the put-call ratio is sitting at 1.14 level therefore there is good scope for a short-covering rally.

(Authored is Head of Research at Swastika Investmart Ltd)

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