14,900-15,100 to decide if Nifty falls or rises

14,900-15,100 to decide if Nifty falls or rises

After the four-day losing run till Friday, the Nifty could bounce a bit but may face hurdles at 15,200-15,300. If the index breaks below 14,950, it could fall to levels of 14,500-14,700. The benchmark, which fell 1.2% last week, underperformed all regional peers except Singapore.


Indices have posted weekly losses for two weeks. Where is the index headed?
On the weekly chart, the index has formed a bearish candle and has closed below the previous week’s low which remains a bearish sign. The chart pattern suggests that if the Nifty breaks below 14,900 and sustains below, it would witness more profit booking which would lead the index towards 14,800-14,600 levels. However, if the index crosses above the 15,100 level it would witness buying which would take it towards 15,300- 15,500. Nifty is moving in a higher top and higher bottom formation on the weekly chart indicating that the medium trend is positive. The index is well placed above its 20, 50 and 100 SMA indicating positive bias in the short term. It continues to remain in an uptrend in the medium term, so buying on dips continues to be our preferred strategy. For the week, we expect Nifty to trade in the range of 15,300-14,600 with mixed bias.

What should traders do?
We could see high volatility due to the expiry week. On the options front, puts are at 15,200 and 15,300 strike, and writers are active at 15,000 and 14,800 strike, which indicates Nifty may find support near 14,800 for the February series. Put Call Ratio currently is at 1.17, well above the median line but within the comfortable zone indicating a positive trend. The weekly strength indicator RSI is moving downwards and is quoting below its reference line indicating negative bias. However, momentum oscillator stochastic is in a positive zone indicating a possible consolidation or an up move in the near term. The market would track rising inflation and increasing Covid cases, along with the prospective US stimulus for further direction. We expect metal, power, oil and gas and infra sectors to show some strength in coming weeks.


Indices have posted weekly losses for two weeks. Where is the index headed?
The weakness continued for the fourth consecutive session on Friday and Nifty slipped into weakness. A reasonable negative candle was formed on the daily chart with minor upper and lower shadow. Technically this pattern indicates a continuation of weakness amidst a range movement or volatility. Though Nifty declined in the last four sessions, the intensity of weakness that we had seen during the latter part of January is absent. The overall market breadth was not sharply negative, as we have seen weakness amidst a range-bound movement or volatility. This action could open an upside bounce in the index. The recent positive sequence like higher tops and bottoms is now placed at the danger of negation, as Nifty moved below the recent higher bottom of 14,977 of February 10 and made a new swing low of 14,898. Hence, this could mean the ongoing downward correction could continue in the short term.

What should traders do?
The short-term trend of Nifty continues to be weak but there is no threat to the medium trend of the market. There is a possibility of some more weakness down to 14,700-14,500 levels if broken below 14,950 decisively. The immediate resistance is placed around 15,150-15,200. The overall chart pattern for the smaller-to-larger time frame of the Nifty signals a buy-on-dips opportunity at the lows. One may look to buy in sectors like banks/PSU banks, metals, energy/oil & gas, midcap and smallcap sectors for decent returns in the coming days


Indices have posted weekly losses for two weeks. Where is the index headed?
Downbeat sentiments in private financials and tech stocks led Nifty to close in the red from all-time highs. However, the way the markets have performed from the Budget day, there are bound to be some corrections and abnormalities. In the expiry week, Nifty should trade in a range and will hold its near-term support at 14,800 levels with the upside capped at 15,300. However, if the index breaks 14,750 decisively and FPIs, who have pumped in Rs 3,300 crore year-todate, start to book profits then we can easily head to the next support at 14,350.

What should traders do?
With the MSCI World Index at all-time highs, traders should build long positions with very strict trailing stop losses. Our in-house quantitative indicators suggest financials and PSU Bank Index can correct while IT stocks — Infosys and TCS — are ready for a rebound and they are also at crucial 50-DMA technical supports, which the IT index has always respected in the past 9-10 months. The positive price action can be seen due to MSCI Index rebalance in Bharti Airtel and FTSE Index inclusion announcement mainly in Apollo Hospital, Honeywell Automation, Hindustan Aeronautics and Tata Chemicals. The Nifty index committee this week could announce Tata Consumer as a replacement for GAIL.

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