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Gaurav Bora, Market Expert

Market started year 2021 on positive note, Nifty closed above 14,000 in a great fashion. Nifty gained 2% and Sensex gained 1.9% in last week. While Midcap & Smallcap index outperformed gained 3% and 3.9% respectively, which is a positive sign for continuation of rally. Passed week rally supported by buying in Auto, FMCG, IT and Healthcare stocks. Positive global cues helped the market gain momentum after consolidation seen in the previous week, signing of second stimulus package by the US, the approval for Brexit deal by the European Union & UK and the development related to rollout of COVID-19 vaccine lifted sentiment. The momentum is expected to continue in the coming week, and consistent FII inflow will fuel into market. India continued to see strong FIIs inflow in December at Rs 53,499.66 crore taking the total inflow to over Rs 1.66 lakh crore in 2020 the year gone by, same to continue in coming year too Indian markets as global investors continued betting on emerging markets but corporate earnings will be closely watched.

DCGI on January 3 granted restricted emergency use authorisation for the Serum Institute of India’s ‘Covishield’ and Bharat Biotech’s ‘Covaxin’ vaccines against COVID-19. India also reported new strain of coronavirus infections but that did not impact the recovery rate which actually improved further to 96.08% this week against 95.77% last week, which continued to support equities. GST revenue collected in the month of December 2020 rose to Rs1,15,174 crore which is an all-time monthly high since the implementation of GST, this signs that economic recovery has been started well. Eicher, Maruti, Tata Motors and Ashok Leyland announced better than expected Sales volumes in the month of Dec. Now ahead of the budget we can expect a further upside rally on the back of a pre-budget rally in the January series. Next week market will keep an eye on quarterly results announced by corporates; TCS is set to kick start the earnings season releasing Q3 results on Friday, January 8.

Key factors for the week:

  • Quarterly Results.
  • COVID 19 Vaccine Progress.
  • Union Budget 2021.

Technical View:

Technical indicators indicate a continuation of up trended move as per long term chart but trader needs to focus on stock-specific action. If Nifty sustains 14,000 levels then we may see rally towards 14,200 and 14,400. The maximum Put open interest shifted to 14,000 strike and is also likely to act as a major support in the coming week. Maximum call open interest at 14,000 followed by 14,200 and maximum put open interest at 14,000 followed by 13,900. Nifty could trade in the range between 13,900-14,400. Move above 14,200 could show Nifty flash rally towards 14,400. The volatility index IndiaVIX is hovering below 20 levels and it is very much in the comfort zone.

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