NEW DELHI: The week gone by was quite volatile for the stock market and coming sessions may not be different. Sensex and Nifty started the week on a positive note, registering gain on Monday and Tuesday, but ended up shedding 1 per cent of their respective value during the last two days of the week.
Market, not just in India but globally, has turned a bit cautious on the back rising number of Covid-19 cases across many nations. This, according to market experts, is impacting investors' sentiment as it can possibly delay global economic recovery. On a weekly basis, BSE Sensex and Nifty50 shed 0.2 per cent each to close at 52,386.19 and 15,689.80, respectively.
"The week's opening was positive but once again the market took resistance near 15900/ 53100 (Nifty/Sensex) and corrected sharply. The important point is, on Thursday, it broke 15800/ 52750 short term support level and post breakdown, selling pressure intensified which is broadly negative for the key benchmark indices. Among Sectors, despite weak market conditions strong buying was seen in Reality and Metal stocks. Whereas, witnessed profit booking in Auto, PSU Banks and selective IT stocks. Technically, on daily and weekly charts, the index has formed double top formation, and the texture of the pattern suggests short term weakness likely to continue in the near future" said Executive Vice President, Equity Technical Research at Kotak Securities Shrikant Chouhan.
Head of Equity Research, Samco Securities, Nirali Shah said that the Nifty50 closed on a mildly negative note for the week, but it is still trading in a range-bound manner. "The index has established short-term support at the 15,500 zone, a break of which will raise a red flag to the ongoing uptrend. This might trigger a profit-booking move and possibly short-term weakness in the market."
Most analysts adviced that it is a buy-on-dips kind of market and investors should follow stock centric approach. According to Chouhan, Reality, Banking and Financial stocks likely to outperform in the near future.
Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking), said, "Traders are advised to remain light and stick to stock centric approach by following strict stop losses. Also, it’s important to keep a close eye on the global developments as well which is likely to set the tone for the forthcoming week." This week, the market would also take cues from earnings announcements and macroeconomic data like IIP, CPI and WPI inflation. The week will also have one of the largest IPOs of recent times- Zomato's Rs 9,375 crore initial public offering.
Chavan added, 'After last two days' of price action, our confidence of predicting Nifty towards 16000 or beyond in the ongoing leg has certainly shaken a bit; but we would still remain hopeful as long as Nifty holds a strong support zone of 15600 – 15450. If these levels are violated then one should get prepared for a decent short term correction in the market. Until then better to trade with a positive bias.