Nifty expects to range between 11430 - 11600 for coming week market : Epic Research

Mr. Mustafa Nadeem, CEO, Epic Research

Nifty marks a new all-time high of 11620 and extends the uptrend for a fifth consecutive week while profit booking in later part of the week caused it to time some upside gains making it almost similar to a shooting star. Bank Nifty is a laggard at the moment as it was stuck for a third consecutive week in the range bound session.

Global cues relatively were positive in starting off the week while later part did the damage to sentiments as the US-China fresh talks for two days ended sending jitters across the globe. US Sanctions on Iran triggered worries in India as it had a direct impact on Oil prices which has been up now almost 5.7%. India is amongst the biggest importer of crude oil from Iran and this may further hurt our already destabilized rupee. INR is already depreciated to above $70 levels and with this, We expect the downside being very limited in the short-term. We expect it further climb to $71 in near term.

Fundamentally, We are seeing a continuous rise in crude oil and accumulation has been seen at lower levels. This will "hurt" the short term upward momentum as a higher crude price will certainly have an impact on India' CAD, Inflation, and INR. For the coming week, traders will be looking at these important factors to gauge the sentiments and movement of the market in broader perspective.

Technically speaking, A shooting star pattern is usually characterized by a prevailing uptrend with the previous candles being bullish. The upper shadow is almost twice or bigger than the real body while No lower shadow is preferred. Nifty hence indicates a kind of an exhaustion on the upside areas of 11600 - 11570. That, we have seen a hanging man on the daily chart as well with Open and high being same, hence it becomes critical for bulls to take out the distribution that is seen at 11600 levels. ON a weekly chart, the trend remains intact and a rising window affirms the continued uptrend. Three white candlesticks also indicate the breadth to be relatively strong. There may be a sideways consolidation that we are expecting in near-term between a range of 11470 - 11600. Given the secular bullish run, we remain positive.

While we will also be witnessing expiry next week which will call in the writers making a Nifty trade in a range. Underperformance from the Nifty bank is another concern being a heavyweight. On the derivatives front, We have seen writing in CE on strikes of 11700 / 11600 which indicates that any upside in very short term is capped at 11600. Buying was seen at 11600 and 11500 PE in Puts front. We expect a range for next week to be between 11430 - 11600.

Source : Equity Bulls

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