Have a great week ahead: The market remained resilient despite numerous headwinds where the flagship Nifty and Sensex indices managed to close with a gain for the second consecutive week. There is selling exhaustion at lower levels as the market rebounds from every intraday dip amid numerous headwinds like a slump in global markets, weak rupiah and a one-time tax on domestic refineries. FIIs are still selling, but momentum has slowed considerably, therefore bulls will look for a turnaround if global markets remain stable. Among all crude oil prices, the dollar index and the movement of the rupee will be other dominant factors.

Technically, Nifty respects the 15700-15500 zone beautifully, but 20-DMA is acting as a significant obstacle on the upside which is currently placed at the 15827 level; beyond that we can expect a short cover rally towards the 16050/16200 levels. The bulls will have the upper hand until the Nifty trades above the 15500 level while below 15500 weakness may resume towards the 15350/15180 levels.

Bank Nifty respects the 33000 level, but 20-DMA acts as a significant hurdle which is currently placed at the 33700 level; above that we can expect a short cover rally towards the 34150/34500 levels while if it slides below the 33000 level then 32500 is the next critical support level.

If we talk about the derivative data, the long exposure of the FII in the future of the index amounts to 16% and the put-call ratio is at the level of 1.14, so there is a good margin for a short cover rally.

(The author is Head of Research at Swastika Investmart Ltd)

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