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While the week ended May 20 was volatile for the market, but bulls managed to keep their hold in the past week and closed on days high. Markets seems to be bottomed out and volatility may get reduced within a week time. Now markets are over sold and close to the bottom and good opportunities are available at attractive prices. I think we are already bottomed out and we may have already made the bottom at 15,700 and from next week which we may see recovery in market. Nifty recovered 3% in past week while Bank Nifty recovered 3.5%. Smallcap recovered 3.9% and Midcap recovered 2.9%, many Mid & Small Cap Stocks bounced back from 200 DMA. I am expecting Nifty may show recovery above 16,313 towards 16,800.
Short term relief in market after China cuts prime lending rate. Global markets will keep an eye on US GDP Number and Fed Minutes of Meeting, fear of aggressively rate hike by US Fed. market has discounted severe monetary tightening by the Fed, which is likely to take the Fed funds rate to around 3% in 2023. Updates on the Russia-Ukraine war will be on the radar next week, supply chain issue is facing globally on account of Russia-Ukraine war.
USDINR declined to close at its fresh lifetime low of 77.61 amid unabated foreign fund outflows and concerns over aggressive rate hikes by the US Federal Reserve to tame inflation. FIIs were net sellers over Rs12000cr just five trading sessions while nearly Rs45000cr net sellers during 6+the month of May while Indian market we are witnessing handsome DIIs buying.
Key Factors:
- Geopolitical tension between Russia & Ukraine
- Increase Interest Rate
- Inflation
- USDINR
- Monthly Derivatives Expiry
- FIIs Selling
Technical View:
Nifty formed bullish candle formation on the daily as well as weekly charts with closing above 16,200 mark, as soon as Nifty sustains above 16,313 level sharp bounce can be seen towards 16,800. After a big fall as soon as Nifty succeed to close above 50 DMA 16,941, we see market to get settled. While important support is placed at 15,400 to 15,600 which is base for markets and resistance is placed at 16,300 to 17,400 levels. Maximum Put Open Interest is at 16,000 followed by 15,800 and Maximum Call Open Interest is at 17,000 followed by 16,300, this shows Nifty may stay in range of 15,800 to 17,000. India VIX came down to 23.10 from high of 24.91, bulls will get confidence when VIX will go below 18.
