WHAT LIES AHEAD : NEAR-TERM PICTURE
The strong global cues and domestic macros held the markets from plunging headlong. However, benchmark indices remained indecisive with tremendous intra-day volatility amid impulsive stock-specific earnings or news-based moves. ITC dropped and dragged down Nifty by 5% on Tuesday on news of imposition of additional compensation cess, but it recovered in the next session, even as Aurobindo
Pharma spurted post USFDA approval for its solid formulation. Therefore, we see Nifty being driven by individual frontline stocks in days to come.
During the week, Nifty hit near 23.6% retracement level of the prior weekly upward rally and bounced back to trade near its all-time high levels, though it could not break the levels of 9928-9930, which we had talked of in the previous index update.
On the sectoral front, the daily losses were majorly led by PSU banks, followed by pharma, metal and IT. On the weekly front, FMCG dragged the markets with 6.7 per cent loss since July 13. On the other hand, realty, metal and banks saved the markets from correcting further and gained 1.4 per cent plus each. Broader markets remained subdued during the week along with the benchmarks.
Nifty is unable to break the level of 9930 on the upside, and hence this level will act as a strong resistance level going forward. Further, we maintain 9950-9990 as the next resistances above 9930. On the weekly time frame, Nifty needs to sustain above 98869913 levels to continue the weekly upward rally. On the downside, 9870 is the major trigger level, below which Nifty can test 98559840 on an immediate basis. 9790 will act as a major support level. Nifty is off its overbought zone, but with a negative crossover on the RSI, which is quoting at 65. However, we maintain positive outlook unless the 9700-mark is breached on the downside. On the upside, Nifty would test the 10000-mark if it breaches 9,930.