After a volatile trading week, what should investors do on Monday?
The S&P BSE Sensex and the Nifty50 closed 0.8% lower each for the week ended July 2
It was a volatile week for Indian benchmarks which ended with minor losses. The Nifty had touched a lifetime high of 15,915 during the week but erased gains and closed below 15800 levels. Meanwhile, the broader market, especially the smallcaps continued to outperform.
The S&P BSE Sensex and the Nifty50 closed 0.8% lower each for the week ended July 2 while the BSE smallcap index closed more than a percent higher, while the midcap index closed flat with a positive bias.
Sectorally, buying interest was seen in consumer durable, energy, healthcare, and telecom stocks, while selling pressure was seen in power, metals, utilities, capital goods, and oil & gas.
Foreign institutional investors (FIIs) have been net sellers for the last three months but the outflows have subsided over the period. In the months of April, May, and June, FII sold equities worth of Rs 12,039.43 crore, Rs 6,015.34 crore and Rs 25.89 crore , respectively.
Going forward, Q1 earnings, monsoon update, new IPOs and listings will be in focus. Crude oil prices will also remain in focus as OPEC+ will resume talks on Monday after failing to reach a deal on oil output policy. The Markit Composite PMI and Markit Services PMI (June) will also be announced on July 5.
Here’s how experts see markets trading on Monday
Manish Shah, Founder, www.Niftytriggers.com
We maintain that the range bound action seen since the beginning of June is more of a time correction. In terms of Dow Theory this is a line and this acts as a continuation pattern. If Nifty manages to trade above 15750-15785 we get triggered on the long side for a target of 15900-15950. If Nifty manages to break past 15950 expect more upsides to 16200-16300 in coming weeks. Most likely it will be advantage bulls in the month of July.
Chandan Taparia, Vice President | Analyst-Derivatives, Motilal Oswal Financial Services
The Nifty continued forming lower lows of the last four sessions but formed a bullish hammer candle on the daily scale, which indicates that declines are being bought.
Now, the index has to hold above 15,700 to witness an up move towards 15,850 and 15,900, while on the downside, support can be seen at 15,600 and 15,500 zones.
Rohit Singre, Senior Technical Analyst, LKP Securities
The index formed a hammer candle pattern after four consecutive bearish candles. On the weekly chart, it formed a bearish candle with loss of nearly a percent.
The index has shown some bounce from its demand zone of 15,600, which will be the support for next sessions also followed by 15550 and dips will be suggested around said levels, resistance is coming near 15,800-15,900 zone.