Market will closely watch supervision and management commentary on Q3 result: Epic Research

Mr. Mustafa Nadeem, CEO, Epic Research

Nifty posts a positive week as positive global cues, subdued global volatility and technical look promising. A rebound from lower levels of around 10700 and a breakout from Triangle pattern along with a range of the week encompassing previous week's indecision says a lot in term of the technical aspect of the price structure. A lot more decisiveness is seen in prices as compared to the previous week.

Global equity markets have seen a sharp pullback from their recent lows on the back of short covering rally. Post-Fed reserve comments, Upward push in Crude oil prices have lifted some hope for the economic sentiment being improved and global demand being firm. SPX rose almost 12% in last one month with half coming in January itself while Indian equity markets remained muted.

Much of the trading range we have seen is denoted as a pause due to a macro-economic event such as Budget, that is coming out in the next few days. A lot of money that can move the market is awaiting the Budget while the recovery from lower levels like 10700 - 10500 in the last few weeks clearly indicates which side the trend is on.

The market will closely watch supervision and management commentary of the companies coming out with their earnings. Coming up result like - Kotak Bank, L&T FH, ITC, RADICO etc.

India's inflation remains muted with WPI inflation at 3.80 %, a surprise of -0.62% while a nosedive of IIP to 0.5% came as a shock though cumulative remained at 5% level. The relief for the economy came when the Fiscal deficit came in much lower than expected at 13.08B(USD).

Derivative data suggest writing on strikes on PE 10700 - 10800 which indicates it to be decisive support in the near term while a long liquidation is seen in 11000 CE. We may see theta in effect and writers jumping in at higher levels. We expect 11100 11000 in sigh but a lot of things now depends on breadth which is at present muted while the undertone of it, as seen in the last few days, remains much better.

All in all, One can remain bullish for a medium-term move to 11000 - 11100 and lower support is seen at 10750 - 10760.

Source : Equity Bulls

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