Bank loan growth data can impact market momentum in coming week : CapitalVia Global Research

Mr. Rohit Gadia, Founder & CEO, CapitalVia Global Research Ltd.

Market this week traded in a narrow range without any directional bias as market participant was clueless before the US Fed's decision on interest rate along with the bank of japan both of which was scheduled to announce their key inputs on the two major global economy of the world during the close end of the week. Most of the trading session market was lackluster as investor was not ready to build any large commitment in the market. After both Bank of Japan and US Fed decision over where they kept the rate around same level, market took a bounce initially with the global market followed by this. But failed to build up momentum and retraced part of the gain to close the week on relatively flat note at 8832.90(as on 16:00 IST) up only by 24 point on weekly basis.

A spinning top candle stick pattern has formed in the weekly chart of the Nifty. On weekly basis market failed to advance it up move and failed to hold at higher level. The spinning top is a indecision type of pattern which when placed after the strong rally could be reversal signal. However we need to confirm the same by the price itself. Holding above 8780 is the key for the bulls, on the other hand bears will take control below the same level.

As long as market is trading above 8780 level, we expect it is likely to resume its uptrend after a period of consolidation around this level. However, chances of a medium term correction will increase below this level or if market failed to build momentum upside next week to cross the important resistance around 8910. From technical setup perspective their is still no confirmation that depicts the possibility of the end of the current trend. Which is very much positive. As such we maintain the medium term outlook as positive and want to see how market behave next week around the key level of 8780.

Among key domestic data next week Infrastructure Output year on year data for the month of August is schedule to announce in coming week. The data of bank loan growth is scheduled to come in next week. The previous data showed a growth of 9.8 per cent, which is already below the average of 13.06 per cent. Any further drop will impact financial sector as loan is large portion of the revenue for the bank. Market participant may remain cautious before the data as if financial which has large weightage in Index fall it could drag the market down. Along with this due to F&O expiry market could witness higher than normal volatility next week. Globally US New home sales data will come in Monday 26th September could bring volatility in global market.

Source : Equity Bulls

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