Weekly Market Outlook for 4th July to 8th July

In the week gone by, Nifty consolidated within a narrow range till the expiry day. However, post expiry a sharp cut in the heavyweight Reliance Ind resulted in a dip in the index towards 15500. But except Oil and Gas, the other sectors performed well and hence, the index recovered from the lows to end around 15750 with a marginal loss.

Nifty Today:

Nifty consolidated within a narrow range for most part of the week and finally it witnessed a sharp cut on Friday morning. Friday’s down move was majorly due to a sharp cut in the index heavyweights from the Oil & Gas space which corrected on news flows. However, Nifty has managed to take support around 15500 and it recovered the losses towards the end due to participation from the other sectors. On the short term charts, this week’s low of 15511 marked another higher low which is a good sign.

On the flipside, participation from the broader markets should also keep the positive momentum intact. Also, if we look at the derivatives rollover data, then it is seen that rollovers in Nifty were lower than average which indicates that lesser shorts have been rolled to July series. FII’s positions in index futures are short heavy and any positive turnaround in the global markets could then lead to some short covering by them. Hence, till the Nifty trades above 15500 mark, one should continue to trade with a positive bias and look for stock specific buying opportunities in the coming week.

On the higher side, 15850-15900 is seen as the immediate near term resistance on the lower time frame charts and a breakout from this should lead Nifty towards the retracement marks of 15990 and 16180.
Amongst sectoral indices, the BankNifty, Nifty IT and the Nifty Midcap100 index are all trading tad below their respective 20-day EMAs. A breakout above this resistance could then lead to a positive momentum and hence, one should look for stock specific momentum from these sectors. The near term trend for the Oil and Gas space has turned negative and hence, one should avoid any kind of bottom fishing in such stocks.