Review and Outlook on Markets - Astha Jain, Senior Research Analyst - Hem Securities Ltd

"Key indices erased all the gains and settled on a flat note last week. The possibility of four rate hikes this year in the US, rising crude oil prices and rising bond yields were among the major concerns that dragged the markets lower. Even promising quarterly GDP numbers failed to cheer the sentiment on the Dalal Street.

Technically, Nifty has failed to surpass both its 21-DMA as well as the 50-DMA. Going forward, a breach below the 10,375 levels would further accentuate the pressure, as it would trigger a Head & Shoulder pattern breakdown on the daily chart. The weakness will reverse only if Nifty manages to close above the 10,640 levels.

On the other hand, Bank Nifty is on the verge of a Head and Shoulder pattern breakdown on the daily chart. The index is gradually entering in to a lower top lower bottom structure, which does not augur well for the overall short term trend. A break below 24,780 will further weaken the index. The current weakness will reverse only if Bank Nifty manages to close above the 25,725 zone.

In the derivative segment, highest Open Interest for Nifty in the current series is placed at 10700CE and 10400PE. For Bank Nifty the highest Open Interest placed at 26000CE and 25000PE (8th March Expiry).

Global macroeconomic data and developments in the Budget Session of Parliament will dictate the trend on the market in the coming. The Budget Session of Parliament will reassemble on Monday. On the domestic macro front, Markit Economics will unveil the result of a monthly survey on the performance of India's services sector in February 2018 on Monday. The Nikkei Services PMI in India increased to 51.7 in January 2018, from 50.9 in the prior month.

On the global macro front, data on Caixin China Composite PMI for February 2018 and Caixin China Services PMI for February 2018 will be announced on Monday While Bank of Japan's (BOJ) interest rate decision is scheduled on Friday. The BOJ had left its key short-term interest rate unchanged at -0.1% at its January 2018 meeting".

Source : Equity Bulls

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