Q4 earnings will affect the market next week - Epic Research

Mr. Mustafa Nadeem, CEO, Epic Research

Nifty ends up for a fourth consecutive week with prices extending to above 10550 levels and Short term DMA to match the previous swing top around 10600. This has been a mild rally since there was a lot of exhaustion in terms of breadth since many indices that were majorly contributing in last two-three weeks have seen some profit booking on the higher side. Bank Nifty also continued to trade in a range with prices in the broader range of 25500 to 24900. There was some profit booking seen at higher levels.

The week started off on a bullish note since global markets were positive on better than estimated earnings and data. European markets were the major ingredient that leads the Asian markets. Major European indices like CAC, DAX and FTSE were above their Feb highs indicating the revival in the underlying trend. The derivatives data suggested a short-term base in Nifty at 10400 - 10450 levels since we have seen a writing at those strikes while the upward momentum is seen extended to 10650 - 10700 since highest OI is seen with long positions build up at that strikes.

Fundamentally, Market will see more of a stock specific action since there is a line up for results that will affect the breadth as prices will adjust to earnings numbers. The week is lined up with numbers for majors like LIC, Bharti Airtel, Reliance Infra, Ultratech, M&M financial, Wipro and so on.

Since we are seeing a short-term base formation at 10400 we would recommend to use the dips and go with the trend for higher targets of 10650 - 10700. Once that hurdle is crossed we may see objective trend continuation to 11000.

Source : Equity Bulls

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