Nifty’s Rollercoaster Ride: Volatility tests bulls at 21800; Know what analysts expect ahead

0
148

And yet, we do not feel confident enough to climb back on the 22240-22400 trajectory that we had been following for the last fortnight. We will revisit this construct once we see a day or two above 21800, while favoured view expects a sideways move at best, or a slow drop to the 20900 vicinity.

Volatility was the key player last week, as Nifty’s fortunes swung wildly from one extreme to the other. While the early surge to yet another record peak appeared business as usual, the turn lower thereof shortly after raised collapse fears, before bulls and bargain hunters mustered enough courage to stage a defence at the 21300 region and succeeded in ending the week on an even keel.

However, my sense is that it is not the 21300s that will be in focus next week, as much as 21800, as it would test the strength and conviction of the buyers that have participated in the bounce off 21300. We will however, open the week on a positive note, seeing Saturday’s special session’s close as continuation to Friday’s morning star candlestick formation.

And yet, we do not feel confident enough to climb back on the 22240-22400 trajectory that we had been following for the last fortnight. We will revisit this construct once we see a day or two above 21800, while favoured view expects a sideways move at best, or a slow drop to the 20900 vicinity.

Nifty Bank meanwhile saw price action finally catching up with the analysts estimates for NIIM compression that were available at the start of January itself, even though it required HDFC Bank to finally tip the scales.

However, the plunge has enabled the index constituents to regroup, and appears to have placed the index better poised to swing higher, potentially aiming 49000, a 7% upside potential from here. Downside markers may be placed near 45000. This paints a different picture that Nifty’s settings would lead us to believe. But, considering it was Nifty Bank which changed the fortunes of the broader market, the index’s rise could quickly improve sentiments.

Rupee also needs mention this week, as interim budget day approaches. USDINR had already made a move lower, but the key level of 82.78 arrested momentum, and swung prices back above 83. The currency pair is now stuck near the sticky region of 83.1-83.17, but given previous week’s volatility, the prospects of breakout beyond 82.78-83.4 required for directional move, are higher.

LEAVE A REPLY

Please enter your comment!
Please enter your name here