Indian Market triggers for next week will be IIP data and Quarterly results: Epic Research
Indian markets scaled new highs this week as many companies posted strong quarterly results and global markets were buoyant. Investors are expecting markets to remain strong and select counters have witnessed renewed selling after sell-off seen few weeks back. Markets could face a correction as well but all that would depend on global cues.
Nifty posts a third week of continued gains taking positive cues from the global market, falling crude oil prices and FII coming back to Indian equity market. Nifty made a fresh all-time high yet again for a third consecutive week of 11495.20 while profit booking dragged it lower to close it at 10429.
On the weekly chart, A formation of spinning top candle is seen which is a reversal pattern as the body is small with wicks on both sides being bigger than the range of its body. This indicates a volatile range is observed while neither bulls nor bears have taken advantage of the same. Technically it is also observed that Post breakout from 11180 the range for the market has become narrowed in present week in a range of 125 odd points. To add more concern we have the volume on the declining mode for the last three consecutive weeks.
This signals a consolidation in the perspective given the fact we have already seen major profit booking in last two sessions in almost major contributors of the rally. Bulls would need to take out the 11500 in early session while the bears will take advantage of above factors to move trend in their favor. It is important for Nifty to hold 11390 and if we see a close below this we may see some sideways consolidation.
SBI Narrowed its Loss while posting a loss for the third consecutive quarter. A dip is seen in Gross NPA from 109 to 10.5 while Net NPA has also reduced. This particularly has furled volatility in the Nifty bank which has formed a bearish engulfing pattern on daily chart. It will be crucial to see Bank Nifty sustain the 27900 mark on the closing basis as well.
Next week a lot of fundamental news will be affecting the sentiments and further put volatility in check as Market will await the manufacturing production y/y numbers which were down at 2.8% previously. IIP number will also be released on Monday which was down at 3.2%. Both numbers will play a crucial role in gauging the market breadth. WPI Inflation y/y numbers on Tuesday will also set the tone which is now up at 5.77%.
It will be a crucial week for the market given above factors and how smart money will play out. We would suggest trailing the stop loss in long position aggressively to the level of 11360. A close below this may push Nifty to 11180. If bulls are able to take out 11500 we may see continued momentum but it will be volatility that will be in the spotlight for initial trading days