Indian Stock Market Watch and Outlook by Epic Research
Indian stocks markets witnessed selling pressure this week but the bullish sentiment returned during the end of the week as Moody's upgraded ratings for India. Market experts are still not convinced about strength in markets to reach new highs next week. Majority of analysts indicate high chances of correction in the market. As results season is about to end, Indian markets will mainly depend on global cues for direction over next few weeks.
Equity markets across the world ended the week in bears grip as most global leading indices from Euro-zone and Asia ends down. The week started off on a negative note as profit booking was triggered at higher levels and continued for the second consecutive week. Though, a recovery was observed in US markets post some positive cues helped Asian indices to see some minor pullback.
Indian benchmark indices followed the tune of global indices as it continued to shred gains and follow the bear's trails. Despite some positive cues coming in the previous week showing an uptick in Manufacturing O/P 3.4 and cumulative Ind. O/P to 2.5%. A dent in Industrial O/P was observed which came at 3.8%, lower than expected. Nifty also closed below it's 20 as well as 50 Days Moving Averages.
The reversal came as a long-expected upgrade which was announced by Moody's which further boost investors sentiment. Buying in the later part of the week almost covered half of the losses in last two weeks. Nifty saw some minor buying on Thursday as it was below its 50 Days MA while a further gain was observed post an upgrade from positive to stable.
Nifty closed the week tad below 10300 marks making a hammer pattern on weekly chart. A hammer pattern is observed usually as a reversal bar. The body is small while lower wick is higher which is double as compared to its body. The close is observed in previous candle's shadow or lower part of the body. Bank Nifty was major gainer as it did recover all losses while also made a fresh all-time high of 25925 levels.
Nifty on weekly reversed from its 20 Days MA while on daily chart it is hovering between 20 and 50 Days MA Band. In coming days, we expect support to be placed at 10180 - 10150 zone as it will attract further lower levels buying. To maintain the momentum we need to have a close above 10400 marks which are an upper band of present channel formation. A close below mentioned supports will seek bears to take the front seat again and drift lower in the coming week. Though, We suggest buying in meaningful dips towards our support zone.
In the coming week, we would have our eyes on Bank loan growth and money supply as markets will take its own course while everything will be glued to GDP data that is expected at the end of the month. Further, Gujarat result will take a toll on bears. Investors should also brace for volatility which is at present the flavor of the street.