What's helping markets stay resilient despite surging Covid cases?
Market is expected to remain range-bound in the coming truncated week
Despite volatility and a range-bound trade, equity markets continued to hold on to positive momentum for the second consecutive week ended May 7.
On Friday, BSE Sensex climbed 424 points to close at 49,206 and the Nifty50 surged 192 points to 14,823. For the week, BSE Sensex added 0.86% and Nifty50 rose by 1.31%.
But, despite the record Covid cases, why are markets not falling?
One major reason for the optimism is the expected response of authorities. RBI’s healing touch in the way of providing further liquidity measures for the sectors impacted by Covid-19 has helped to lift sentiments. The increasing pace of vaccination has aided domestic sentiments positively while global cues including US President Joe Biden’s decision to waive intellectual property rights on vaccines also lent support.
Besides, experts say that earnings are reflecting positivity on balance sheets and the restricted lockdown has not impacted supply chains like last time.
Earnings will keep investors busy as total 165 companies will declare March quarter earnings next week including major ones like Asian Paints, Lupin, UPL, Vedanta, Cipla, Dr Reddy’s Laboratories, and Larsen & Toubro.
Manish Shah, Founder, www.Niftytriggers.com
Nifty closed the week with a marginal gain of 1.74%. The candle for the week is a bullish green candle that closed at the high of the week. Though we have not seen a range expansion. For the last three weeks, the Nifty has seen green candles and after a span of 11 weeks, the index has shown a long green candles closing at the highs.
Nifty closed above the 50 period moving average and this could be a bullish development. Nifty needs to break above 15,050-15,000 if the rally has to continue.
From the weekly time frame, we can deduce that buyers have gain traction during the week. But the last point of resistance remains at 15050-15000 zones. The consolidation in Nifty is significant and if break above 15050-15000 materialises we should see a sharp rally in the weeks to come. If Nifty slips below 14650 expect some decline to 14,300 zone.
Chandan Taparia, Motilal Oswal
Nifty formed a Doji candle on the daily scale but a Bullish candle on the weekly frame which indicates that declines are being bought while hurdles are intact at higher zones. Now, it has to hold above 14,750 to witness an up move towards 15,000 -15,050 while on the downside support exists at 14,700 and 14,600 zones.
Ashis Biswas, Head of Technical Research, CapitalVia Global Research
The rally might continue till the level of 14,900. Though it is subject to further price action but if the market breaks the level of 14,900 and sustains above the level a new bullish rally will take place till the levels of 15,200.