Infy results are widely expected to be better though with a lower guidance - Epic Reserarch

Mr. Mustafa Nadeem, CEO, Epic Research

Another week with gains as Nifty ended it for a third straight week on the back of positive global cues and ease in risk aversion amongst investors as trade war clouds shun away. Bank buying was seen across the board. There were some leaders and losers. IT sector performed well with a breakout of consolidation and leading the rally along with private banks and Metal. Auto sector saw some muted efforts while PSU Bank Index reversed after a two week of consecutive gains as selling pressure was clearly visible in them.

The global cues were largely positive as soon as the Chinese Head remarks related to open economy came in. The overall global data was mixed while it was largely bullish on the back of expected improvement in earnings of US companies to around 13 - 15% of Q1 earnings for FY18. The US futures were up with DOW above 24k mark while S&P was also up as demand came in at 2600 to push prices up. The global sentiments also improved with the improved breadth and positive closes seen for this week.

Nifty ended up for the third week as it retraced almost 50% of previous fall from 11171-9951 and saw some mild profit booking in the last session which was widely expected. The "Three white soldiers is a reversal pattern usually we see on minor bottoms but the important point to note here is that we are halfway mark of a previous bear trend and a follow up is strictly required for bulls. In case Nifty is not able to move beyond 10550 - 10540 then we may see some sideways to negative momentum brewing up since it will be opportune for bars to add or position size on existing bearish trend. Bank Nifty is likely to see some resistance in 5 digits at 25300 - 25400 where we expect resistance at it is 20 SMA on weekly chart which is a line in the sand. In case we are not above that then we may see the throwback to 24800- 24900.

FII and DII data has been mixed for the entire week since we have seen a continuous buying from DII while FII were largely negative throughout but turned positive in last two sessions with minimal net purchases. From derivatives front, we are seeing some writing in higher strike prices of 10500 - 10600 while 10300 is the fresh bottom which may try to hold the momentum in the intermediate term.

Infy results are widely expected to be better though with a lower guidance. Technically we have been bullish in stock since 1100 Levels and we expect it would inch higher unless closed below 1100. IIP Data has been good for past few months and widely in with expectations as it has been sustaining above 7. It will be critical to see it remains above 7or we see a reading below it.

Source : Equity Bulls

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