Weekly Market Outlook for 10 June to 14 June

The eventful week witnessed significant volatility where the Nifty corrected by over 2000 points from Monday’s high, and recovered those losses by the end of the week to post weekly close around 23300 with gains of more than three percent over previous week’s close. 

It was a big event and volatility was at its best, but as it is said “All is well that ends well’. Our markets witnessed a sharp correction on fear of some possible political turbulence, but finally the end results of the event brought confidence amongst the market participants which led to renewed buying interest. FIIs had short heavy positions with ‘Long Short Ratio’ around 13% percent at end of Tuesday. Historically, such ratio is always seen as short heavy positions and they then cover those positions which lead to new high on the index. This history repeated once again and hence, their short positions were just like an icing on the cake. Now with such momentum, markets should continue the uptrend going ahead as RSI on both the hourly and daily charts are in positive mode. If we see any dip in the coming week, then it could be probably to form a ‘Higher Bottom’ as lot of market participants who were waiting on sidelines for the event to get over will be look for buying opportunities on any decline. Hence, we advise traders to trade with a positive bias and look for buying opportunities on any declines. The immediate support for Nifty is placed in the range of 22800-22700 (hourly EMA supports), followed by 40 DEMA support at 22525. On the higher side, the retracement of this last weeks correction indicates possible target/resistance around 23900.

Most of the sectors have regained positive momentum, but IT emerged as an outperformer and after a corrective phase of last few months, there are signs of revival and thus the price wise corrective phase seems to be behind. Nifty Pharma index too has ended with a consolidation breakout and hence, selective pharma names could also do well. The overall market breadth is strong and hence, the broader markets could continue the momentum which could provide good stock specific trading opportunities in the coming week.  

                                  High volatility seen in event week, but ‘All is well that ends well’

Nifty, Bank Nifty Levels and  FINNIFTY Levels: