What's next for markets after they clocked in their best-weekly gains since Budget week on Friday
The price action during the course of the week is very bullish and traders should be prepared for a firm rally over next 6-8 weeks
Indian equity indices bounced back sharply on May 21. The Sensex and Nifty ended with strong gains led by broad-based buying across sectors amid positive global cues.
All sectoral indices closed in the green with Nifty Bank surging over 3% followed by financial services, IT, auto and realty indices.
In the broader markets, Midcap and Smallcap indices also supported the rally. The Sensex closed 975 points higher at 50,540 on Friday, while the Nifty50 rose 269 points to close at 15,175. The BSE midcap index rose 0.8% and the smallcap index closed with gains of 0.65%.
The market recorded its biggest weekly gain since the budget week. The Sensex closed last week with gains of 4%, while the Nifty gained 3.4% for the week ended May 21.
IndusInd, SBI, M&M, HDFC Bank, ICICI, Bajaj Auto top Nifty gainers this week. Only 10 Nifty stocks gave negative returns this week; Bharti top loser.
Sentiment turned bullish on reports that Centre is working on another round of stimulus with focus on cheaper loans to MSMEs, employment generation across rural and urban areas, and reduction in cost of capital.
Here’s how experts see markets trading on Monday
Ajit Mishra, VP – Research, Religare Broking
Markets rebound sharply on Friday and gained nearly 2 percent, tracking firm global markets and supportive local cues. We feel global cues will continue to dictate the trend in near future. The recent buoyancy in the banking and financial is certainly encouraging and participation of other sectors on a rotational basis would further fuel the recovery. We suggest continuing with a positive yet cautious approach and reiterate our immediate target of 15,300 for Nifty.
Rohit Singre, Senior Technical Analyst, LKP Securities
The index opened the day with a good gap and managed to hold its bullish stream throughout the day and gave a bullish flag sort of breakout on the daily chart, which hints bullish momentum can extend further.
The Nifty formed a bullish candle on the weekly chart, and 15,100-15,000 will act as a strong hurdle.
If the index manages to sustain above this level, it may head towards its previous swing high. Overall, the immediate hurdle is near 15,250-15,350 zone.
Manish Shah, Founder, www.Niftytriggers.com
Nifty closed the week sharply higher by 2.23%as compared to the close of the previous week. The quality of the candle was very bullish. We see a range expansion as the real body of the candle was the widest in last several weeks. The close of the candle was at the top end of the range. Weekly RSI nudged above 60 which is a bullish sign.
On the daily time frame Nifty closed the day sharply higher. We see a breakout of an ascending triangle. This is a pattern of a basing variety and suggest higher levels.
Nifty is nicely poised to rally and break above the resistance at 15400-15500 over next couple of weeks. As we head in to May expiry Nifty will try to trade beyond 15200. Possibly aided by a sharp recovery in Bank Nifty
Price and pattern break out for the week are very significant from a view of next 6-8 weeks and the upside potential in Nifty is towards 16000-16200. The price action during the course of the week is very bullish and traders should be prepared for a firm rally over next 6-8 weeks.