All eyes will be on crude oil movement and INR in the coming week : Epic Research

Mr. Mustafa Nadeem, CEO, Epic Research

Nifty posts a second consecutive week of losses after almost 14 weeks as pressure continues to remain on the upside. On the weekly scale, it is after three months we have seen benchmark index making a red candle while it has been marginal compared to previous week as lower levels buying emerged.

A Hammer Pattern is formed on the weekly chart after a brief downward move which indicates important supports at the lower level. A hammer pattern has a long lower shadow which is almost twice, or more, than the real body while, on Nifty, close is significantly within the lower half of the previous candle implicates the rebound.

Secondly, Price action took the support of 50 Days MA on Daily scale which is a further important point of support in an established secular uptrend. Both of these factors indicate a possible pullback that can be turned in an medium-term upward momentum.

The overall momentum indicator analysis depicts MACD is still bullish while there is a possible overbought indication in Stochastic and RSI.

While on daily scale prices look beaten down as well. We may see some consolidation in a broad range of 11650 - 11400 in coming days. In a broader perspective for coming week, Support is seen at 11300 - 11350 while on upside support is seen at 11650. We suggest having a Buy on dips strategy on supports mentioned above.

Fundamentals remain strong for bulls as inflation has cooled off to 3.69% vs 4.17% while manufacturing production has also shown an uptick coming at 7% vs 6.7%. In coming week All eyes will be on crude oil movement and INR as that is a point of concern for bulls given a continuous depreciation in INR. Trade tariffs will be in the front seat and Asian markets opening on Monday will set the tone.

Source : Equity Bulls

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