Despite remaining positively flat on week-to-week basis, the Indian equity market stayed resilient to global sell-off rout on account of strong macro data with inflation coming lower at 3.31 percent coupled with RBI’s OMO to inject liquidity worth Rs 12,000 crore through a purchase of government securities.

Further, a substantial fall in crude oil price from USD 86 levels to currently at USD 65.88 levels aided the market with positive sentiment on easing deficit concerns.

During the week under review, Nifty managed to breakout from immediate resistance of 10,616 levels on intraday basis to touch weekly high of 10,651 levels, but lack of conviction at higher level dragged the index. It made a weekly low of 10,440 levels but managed to bounce and closed the session at 10,616.70 levels with gain of 0.29 per cent on week-to-week basis.

The rally was primarily led by Nifty Bank and consumption which was up by 1.51 percent and 1.15 percent, respectively, on a weekly basis. However, Nifty IT and pharma were among sectors that declined by about 3.01 percent and 2.51 percent respectively in same period.

On weekly price chart, the Nifty index formed a ‘hanging man’ kind of candlestick pattern for a consecutive week, partly indicating a lack of strong direction.

The weekly RSI on chart stood at 46 levels down from earlier level, while MACD continued to trade below its signal-line. With positive level on closing basis this week, the resistance is seen at 10,650-10,712 levels for the index and support at 10,440 levels.

The softening of crude oil price and gradual easing of deficit concerns coupled with prompt course of action by RBI to keep liquidity afloat is expected to market sentiment on positive curve.

However, given rangebound trade for consecutive sessions with lack market direction, it is advisable to trade on stock specific opportunities with strict stop loss. We continue to maintain a rangebound trading level for index at 10,690 levels on upside and 10,520 levels on downside.

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