Will the market rally continue amid macro news and earnings in the coming week?

The Indian market regained momentum and Sensex bounced back above the 50K mark on Thursday following the gains in global equities. The S&P BSE Sensex had risen 520 points to close at 50,029, while the Nifty50 had closed with gains of 176 points to shut shop at 14,867. Buying was largely seen in metals, banks, power, infrastructure space, while FMCG and consumer durables had witnessed profit booking.

In the week beginning Monday, markets will be guided by cues from the RBI’s interest rate decision, macroeconomic data, COVID-19 trends, Q4 earnings and global cues .

Here is what experts say investors should do on Monday

Shrikant Chouhan, Technical Analyst, Kotak Securities 

On Thursday market closed with a very strong breadth. At least five stocks came out positive in the face of negative endings. On a daily basis, the Nifty/Sensex closed above the 20-day average and so the Nifty/Sensex can now challenge the peak of 15335/51800. As per candlestick formation, the market has formed a bullish continuation formation that might send the market to minimum of 15100/51200 levels.

Also, on a weekly basis, the level of 14880/50050 has been broken, indicating a rally. The next level 14600/ would be considered a significant support area. A positive move in global markets, a drop in bond yields and a slight easing in the dollar index could help the Nifty to move beyond the 15,450 levels. Below 14600/49300, Nifty would retest the levels of 14400/48700 or 14250/48200.

It was a truncated week for the market and FIIs turned net sellers to the tune of 900 crores, however, domestic institutions infused more than 4000 crores in the cash market. The strategy should be to buy on dips with a stop loss at 14600/49300. The focus should be on commodities, Banks and Pharma companies.

Manish Shah, Founder, Niftytriggers.com

On Thursday, Nifty settled at with a gain, after two weeks of a negative close. The pattern for the week was a green candle. The candle is particularly impressive as it closed at the top of the range and it has no shadows making it all the more bullish candle. Prior two weeks were candles with bottoming tails and on the weekly, it is almost a bullish ‘Morning star” pattern.

On the daily charts, it is a green candle and the pattern is that it is moving above the 14890. Now the pattern is breaking above the minor resistance at 14890. This could be the trigger for more upsides in the days to come.
Nifty seems to be completing a major Elliot wave pattern and the entire sideways action is breaking down into an ABC flat. If the pattern holds true we could be seeing a major move coming in nifty in the days to come.

Over next 8-10 days Nifty should rally to 15200-15300. Nifty has now closed above its 20-days moving average which should propel it higher. Expect Nifty to move towards 15200-15300 if a break above 14890-14900 holds. Support is pegged at 14700. Expect a bullish bias on a break above 14900.