Two factors are possibly stopping the market from moving on either side. The first one, for obvious reasons, is West Asia.
Crude oil prices have jumped from $70 to $85 a barrel in a matter of days. There are signs of escalation, and the rhetoric emerging from the region is not promising whatsoever. It is possibly for this reason that oil prices did not cool off despite US President Donald Trump walking back on his 20% toll proposal that the US wanted to collect for safeguarding the Strait of Hormuz.
With oil prices remaining on the tenterhooks, the markets are awaiting further clarity on what will be the eventual outcome of these recent developments. In case crude prices rise further, it could have a negative impact on the currency, which is already back near record low levels against the US Dollar. That, in turn, would impact the markets as well.
The second factor is also a straight forward one, earnings. The quarterly reports have only started to pick-up steam and the 24-hour period after market closing on Friday and Saturday evening, would possibly determine which direction the market would take.
During this 24-hour period, at least 35% of the Nifty 50 weightage will be reporting its quarterly results, starting with Reliance Industries on Friday evening and then the big banking Saturday, which will not just include HDFC Bank and ICICI Bank reporting results, but also have Kotak Mahindra Bank, Axis Bank and Yes Bank playing their parts too.
These in itself is more than 60% of the Nifty Bank index and that has been a bigger outperformer and stronger among the two indices, when compared with the Nifty 50.
For the immediate term, going into Thursday’s trading session, which also happens to be the Sensex weekly expiry, the bulls would continue to hope that 24,000 is defended on the downside, as has been the case over the last four trading sessions. On the upside, the 24,250 – 24,350 zone remains a resistance band and only a break above that could take the Nifty back towards its recent high of 24,530.
Thursday’s trading session will see the market react to results from Angel One, HDB Financial Services, ICICI Lombard, Sai Silks Kalamandir, and Network18, among others.
On the flip side, 360 ONE WAM, BHEL, CEAT, GNA Axles, ITC Hotels, Jio Financial Services, Neogen Software, Piramal Finance, Polycab, South Indian Bank, Tech Mahindra, WeWork India and Wipro are some of the major results that will be reported.
Should You Buy Or Sell The Nifty?
Nagaraj Shetti of HDFC Securities sadit aht the Nifty is currently lacking the strength to sustain at higher levels and a only a break on either side of the range could give the market some direction. He expects the current sideways movement to last for another 1-2 sessions. He sees immediate support at 24,000, followed by 23,800.
“Going ahead, the immediate support for Nifty is placed in the 23,950 – 23,900 zone, which coincides with the 50-day EMA. Any sustainable move below this zone could result in Nifty extending its weakness towards 23,750, followed by 23,600 in the short-term. On the upside, the immediate resistance for Nifty is placed in the 24,200 – 24,250 zone,” Sudeep Shah of SBI Securities said.
Nifty Bank Faces A Hurdle Above 58,000
Although it outperformed the Nifty on Wednesday, the Nifty Bank too, cooled off from the highs, which were well above the 58,100 mark. The 400-point drop from the day’s high meant that the index closed below the 58,000 level and with major earnings lined up, the bulls may be wanting to take it a little easy at higher levels for this index as well, thereby having an impact on the Nifty moves.
Om Mehra of SAMCO Securities said that the index appears to be undergoing a timewise correction with the MACD line staying below the signal line and the histogram in negative territory. He cited 58,200 as an immediate hurdle for the index, while supports were placed well below at 57,200, followed by 56,900.
LKP Securities’ Vatsal Bhuva also sees the Nifty Bank’s range between 57,000 and 58,200 on the upside. He said that despite the rangebound moves, the broader undertone is bullish and advices a buy-on-dips approach near support levels and profit booking near the resistance zone.
