Nifty, Sensex up nearly 3%, resistance at 16400; Instability continues, focus

The Bulls made a strong comeback on Dalal Street on Friday as Indian benchmark indices erased earlier losses and Asian markets and US equity futures gained nearly 3%. The BSE Sensex closed 1,534.16 points or 2.91% higher at 54,326.39 and the NSE Nifty closed 50 456.80 points or 2.89% higher at 16,266.20. Metals, Pharma, Capital Goods, PSU Bank and Realty indicators all rose in 3-4%, with all sectoral indices ending in green. In the broader market, the BSE Midcap and Smallcap indices rose 2% each. As the results-season draws to a close, there will be a greater focus on macro data points, including inflation data, tightening monetary policy, and rate hikes by central banks.

Srikanth Chauhan, Head of Equity Research (Retail), Kotak Securities

“After witnessing sharp declines over the past two weeks, equity markets ended on a positive note this week. However, following the global signal, the Indian equity market experienced major volatility. Benchmark indices like Sensex 30 and Nifty 50 gained between 2-3%. The overall market breadth was positive with witness gains in mid-cap, small-cap and most sectoral key indices. In recent weeks the metal sector has rebounded sharply after a steep correction. The BSE IT index was down in an otherwise positive market this week. FII continues to sell them in India. Markets were cautious about global growth-inflation expectations. As the results-season draws to a close, the focus will be more on macro data points. The tightening of global monetary policy by central banks in the face of high inflation will continue to weigh on market sentiment. “

Palak Kothari, Research Associate, Choice Broking

“The Nifty has formed open bullish marabuzu in a daily time frame which indicates a reversal for the upcoming session. Further, the Nifty is trading in the range of 15750-16410 levels throughout the week and may point in any direction beyond any direction. Also, the Nifty has closed above the 9-day moving average which indicates that a bounce back can be seen from the lower levels. However, the Momentum Index MACD and Stochastic were trading with a positive crossover and reversed from the oversold zone on the hourly chart which suggests a northward move to the counter. The Nifty could find strong support near the 16000 level, while the 16410 could act as an immediate barrier to the uptrend. Bank Nifty, on the other hand, supports the 33200 level and resists at the 34800 level

Amal Athawale, Deputy Vice President – Technical Research, Kotak Securities

“The market took a full U-turn from Thursday’s recession as the recovery after a recent crash and the recovery in other Asian indices has strengthened sentiment back home. China’s central bank has slashed its 5-year loan prime rate from 4.6% to 4.45%, and the easing of covid-related restrictions has also given the market a big leg up. Technically, after a sharp price correction, the Nifty finally found support near 15750 and bounced back sharply. On the weekly chart, the Nifty has recovered 16000 and is trading comfortably above the 10-day SMA. If the index manages to trade above 16000 and above that it can move to 16400, the reversal is likely to continue. Further uptrend may continue, which could push the index up to 16550. However, below 16000, the uptrend will weaken and the index could hit the 15800-15700 level. “

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