Indian Markets to face resistance at higher levels - ZENMoney

The market fell to a low of 5683 after correcting below the crucial 200dma level placed at 5790. It touched a low of 5683 level before witnessing a recovery on Friday. The 200dma level would continue to be the key support level for the market in the short term. While a decisive close below this level for 2 consecutive days would indicate more downside for the market, a decisive rally above 5921 would indicate that the possibility of the recovery sustaining at higher levels.

The Indian markets are likely to remain volatile and track global and domestic events for short term cues. Global markets are likely to remain choppy ahead of the Fed's meet on the 19th July where a decision on interest rates are likely to be taken. A positive move from the Fed can boost global and domestic sentiments.

Back home, the key trigger for the market this week would be the RBI's Credit Policy Review on the 17th. Despite inflation easing to a two year low, the RBI will be hard pressed to cut rates due to a host of challenges such as high consumer inflation and a sliding rupee which is at a record low. A positive move from the RBI however can bring some cheer to the market. While lack of rate cut is expected to dampen the market sentiment.

The market will also be tracking the FII flows for direction. FIIs have been net sellers in the Indian market in the last week amid weak macro economic data and sliding rupee. A pick up in the Rupee is expected to improve the FII flow, bringing back the positive sentiments into the market.

While 5790 and 5750 and 5683 are important support levels for the Nifty, 5853, 5921 and 5973 are important resistance levels for the Nifty. The 19164, 19098 and 18827 are the immediate support levels for the Sensex 19466, 19635 and 19860 are the immediate resistance levels for the Sensex.

The market recovery is expected to face resistance at the higher levels.

Source : Equity Bulls

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