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Consolidation may halt momentum in coming week..

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Market made high in previous week, and closed on highest weekly levels. Four year moratorium on payment of AGR for the telecom sector, a PLI for the automotive segment and government guarantees for security receipts worth Rs. 30,600-crore to be issued by National Asset Reconstruction Company. Sensex climbed 710 points (1.22%) to 59,015 and Nifty moved 215 points (1.24%) to 17,585, while the broader market traded in line with the Nifty Midcap 100 rose (1.9%) and Smallcap 100 climbed (0.9%) during the week. The rally was across sectors with Auto, banks, and IT stocks, whereas realty and metals were under pressure. Some consolidation and range-bound action can be seen in market in next week, all eyes will be on the Feds meeting held on September 21-22 as Federal Reserve and its commentary over tapering plans. Reforms announced by the government improved FIIs sentiments; FII inflow was one of the reasons that market shown rally towards new high. FIIs have net bought Rs 6,476 crore worth of shares in the last week, whereas DIIs seems to have preferred profit booking as they net sold Rs. 2,896 crore.

Global cues on account of worry over slower economic growth and rising Delta variant cases globally would be import factor for coming week, cautious view can be seen in the market next week ahead of the Federal Reserve meeting. India has managed to keep daily infections to below 40,000 for quite some time now. Significant increase in pace of vaccination and in recoveries which is supportive factor for the economic recovery and rally in equity markets. India sets record with 2.5 crore vaccination on PM Modis Birthday, which will accelerate vaccination speed in the country in coming time. World’s largest economy United States is seeing Delta variant cases and in fact it has been adding more than lakh cases every day that may add some worry in global markets.

 

 

Key factors for the week:

  • FOMC Meet on September 21-22
  • Rising COVID 19 cases
  • Paras Defence and Space Technologies will open its IPO from September 21-23. Sansera Engineering IPO listing on September 24.

 

Technical View:

The Nifty formed bearish candle on the daily charts on Friday Sept 17. Considering the chart pattern some consolidation can be seen going ahead in coming week. Possibility of minor correction can’t be ruled out in the coming week. While important support is placed at 17,400 and there is a possibility of upside bounce from the lower levels. If Nifty sustains 17,700 levels then we may see momentum towards 18,000, while below 17,400 will act as support. The maximum Put open interest at 17,600 followed by 17,400 strike and is also likely to act as a major support in the coming week. Maximum call open interest at 18,000 followed by 17,800 and is also likely to act as a major resistance in the coming week. Nifty could trade in the range between 17,400-18,000. The volatility index India VIX moved up from 13.94 to 15.25 levels, indicates volatility can be seeing in the market ahead.

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