Expect market to trade with the positive bias in the coming week

Mr. Abnish Kumar Sudhanshu, Director & Research Head, Amrapali Aadya Trading & Investments

Taking the negative cues from sluggish manufacturing and industrial production data, benchmark indices made flattish opening of the week on Monday. However, softening in inflation data saved the day and provided positive sentiments to the lackluster market to trade on the positive territory. WPI which reflects the annual rate of price rise has risen for the second straight month in January. WPI stood at 30-month high of 5.2 per cent in January as against 3.4 per cent in December. This data again put the pressure on the indices. Further, market went under fear of US rate hike after Jenet Yellen in her monetary policy review reiterated of possible rate hike in the future on the back of economic growth and inflation rise. She also stated that Waiting too long to raise interest rates would be "unwise". Further, weak corporate earnings from Tata Motors and Sun Pharma also added selling pressure in the weak trading indices. However, market remained in the cheerful note on the last two days of week following the USFDA clearance for Cadila Healthcare, which increases buoyancy for more USFDA approval for several pharma companies going ahead. Adding to it, IT companies also contributed to the rally on the expectancy of Buyback news in TCS and Infosys.

Overall, pharma & IT along with many other sectors led the benchmark indices to close on the positive note. Though, coming week is more or less to remain eventless in the absence of any major trigger in the domestic as well as global market. However, traders would be keenly eyeing the outcome of the state election results to receive more clarity on the several stalled projects. Also, TCS board meet in regards to buyback is scheduled for Monday, which could give us some signal for the sector optimism. Most importantly, Nifty Feb month expiry is also falling in the coming week, so we can't rule out the volatility in the market. Overall, we expect market to trade with the positive bias in the coming week.

Though market loses some of the early gains still it closes with a gain of half a percent. Sentiment also remains buoyant as broader market remains resilient. Technical build of the market show huge amount of call unwinding at 9000 which is an upward build up.

With F&O expiry due on the card next week market to remain highly volatile and support could be at 8750 and on the higher side 8900 remain a resistance point.

Source : Equity Bulls

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