Week Ahead

Apart from that short covering and value buying in most beaten down quality stocks including index heavyweights also pushed the market higher. The BSE Sensex rallied 589.31 points to 57,696.46, and the Nifty50 climbed 170.25 points to 17,196.70, while the broader markets also joined the rally, with the BSE Midcap and Smallcap indices rising around 1.35 percent and 1.25 percent respectively.

We feel the market is expected to remain volatile in the coming week as well, amid Monetary Policy Committee meeting, Omicron uncertainty, and economic data.

The Monetary Policy Committee, after three-day meeting, will disclose its interest rate decision on Wednesday. The street will closely watch how the RBI will react to the current Omicron crisis, economic growth, inflation numbers and hawkish US Fed.

Technically Nifty50 managed to get back and hold on to crucial 17,000 mark during the week, forming bullish candle on the weekly charts, but corrected over a percent on Friday and saw bearish candle formation on the daily scale. Overall we feel the market is expected to remain rangebound and if it decisively breaks 17,000 mark then there could be increasing chances of index moving towards 16,500 levels.

While Nifty corrected sharply it finally took support near 16,750. In an extremely volatile week, the Nifty succeeded to close above the 100-day simple moving average -SMA (17,169) which is broadly positive.

The option data indicated that the Nifty50 could be in the range of 16,800-17,700 levels in coming days, while the declining volatility could play a supportive role for the market.