Markets may face more volatility in the truncated week. Here's what investors should do

The stock markets regained some lost ground on Friday but ended another week of lacklustre trading with weakness of around 2%. This was on the back of weak global cues and worries over the second COVID-19 wave.

Snapping previous two session losses, the BSE Sensex surged 568 points or 1.17% to close at 49,008, and the NSE Nifty ended at 14,507, up 182 points or 1.27% on Friday. In line with benchmark indices, broader market also settled higher, with Midcap and Smallcap surging 1.8% and 1.1%, respectively.

Of 30 Sensex shares, only ONGC, TCS, Powergrid, IndusInd Bank ended in the red, while remaining 26 shares settled in the green.

The markets were shut on Monday on account of Holi. It will open the truncated three-day week on Tuesday. Most of the experts see COVID-19 infections, macro-economic data like PMI manufacturing & services, IIP and auto sales to influence the market movement in the April series.

Here’s how experts see markets trading in the holiday shortened weekend.

Manish Shah, Founder, Niftytrigers.com

Nifty closed the week with a mild drop of 1.6%. The pattern on the daily was a Doji as the open and close were are nearly the same. The pattern for the day is a “Harami Cross”. But the special point is that the inside day was in top one third range of the previous day. This is a bullish pattern.

Nifty did not have a follow through after the sell-off in last two days and the pattern that emerges is that after a punch below the low of February 26. After two hard days of selling Nifty did not see a follow- up selling. The question is whether we are seeing a failed breakout on the down side.

The larger degree trend on the weekly is up and in last two days we see candles with bottoming tails. There is absolutely no doubt that the trend on the larger degree time frame is up and what we see now is a corrective decline on the weekly.

Failure of Nifty to hold above the support at 14450 raises a possibility that the break on the down side is failing. We now need to let Nifty show is the way. Between 14400-14800 it is difficult to guess the direction. Nifty needs to move above 14800 for a rally to 15050 and above that to 15200. If Index breaks below 14330 expect the lows of the budget to be tested.

Shrikant Chouhan, EVP, Equity Technical Research at Kotak Securities:

On a weekly basis, the market has completed a corrective pattern and the Nifty could see a level of 14,750 or 14,900 until it breaks to 14,250.

Bank Nifty is also expected to move to the level of 34,700 above the resistance at 33,700.

The focus should be on FMCG and Capital goods. During the week, FIIs sold to the tune of Rs 6,000 crore till Thursday, while domestic institutions bought over Rs 3,000 crore.

During the week the dollar index was the biggest factor that dragged the sentiment of the market.

In the coming week, again the trend of the market would largely depend on the trend of the dollar index.