In previous weeks, the market remained volatile. A clear tussle between bulls and bears was visible, but neither of them had a convincing advantage against the other. According to some experts, the market respected the support and resistance predicted by analysts for the week.
An in-depth analysis:
The Nifty50, which represents a group of stocks, found strong support around 19,300 points and managed to bounce back to finish the week above 19,500 points. However, there’s a worrisome pattern of consistently lower highs and lows in its movement. This pattern could prevent a big increase in the index unless it changes.
The weekly Option data suggests that the Nifty50 could encounter resistance around 19,600-19,700 levels, while 19,400 is anticipated to act as an immediate support for the index.
In simpler terms, the market might be unpredictable in the coming week because of quarterly reports from different companies and some important events scheduled to happen.
¤ FII,s Activity
In the last five months, foreign investors have been buying a lot in the Indian stock market. But now, they’ve started selling and took out more than Rs 2,000 crore in the first week of August.
According to experts, there are several reasons for this to happen:
1. Credit rating agency Fitch lowered the credit rating for the U.S from AAA to AA+.
2. A sudden spike in US 10 year bond yield over 4 percent.
3. Low chances of rate cuts by FED any time soon.
Besides that, the prices of stocks were very high, and some people wanted to take their profits, so they sold too.
¤ What to expect for the upcoming week
In the upcoming week, the market may remain volatile as traders may book profits at higher levels. A contest between bulls and bears may be seen, as well as a stock-specific rally.
Chances of market remain volatile is very high due to following reasons:
Domestic factors:
- The RBI is set to announce its interest rate decision. Thus, markets are likely to move in a broader range with some volatility.
- More than 1,800 corporates will release results next week including prominent names like Adani Ports, Coal India, Hindalco Industries, Grasim Industries, Hero Motocorp, and ONGC etc.
Global Factors :
- On the global front, the participants will take a cue from the US inflation numbers released on August 10.
- Disappointing factory data by China.
- Eurozone weighed on the sentiment.
Conclusion
The market pays attention to both local and worldwide feelings. It could stay volatile and trade within a certain limit. If you’re a trader, it’s smarter to stick to risk management and have a clear, focused goal. Avoid making impulsive trades out of frustration and don’t get caught up in excessive trading.
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