Market Outlook: Markets in consolidation mode; Strong support for the Nifty around 10,120

Mumbai: The markets have begun the week on a jittery note amid negative cues from the overseas market. Markets across Asia were seen trading in red after the US markets logged heavy losses on Friday amid record rising Covid-19 cases. However, given the positive trend, our markets were able to recoup partial losses towards the end of the day.

The BSE benchmark index, the Sensex, opened with a negative gap of 240-odd points at 34,927. Weakness in the early morning session saw the BSE index slide to a low of 34,662 – down 510 points from the previous close. The Sensex, however, recovered partially and settled with a modest loss of 210 points at 34,962.

Axis Bank was the major loser among the Sensex 30 stocks, the stock tanked nearly 5 per cent in trades today. Tech Mahindra, Larsen & Toubro, SBI, IndusInd Bank, Infosys, NTPC and ONGC were the other major losers, down 2-3 per cent each. On the positive side, HDFC Bank outperformed with a gain of 2 per cent amid reports of raising fresh capital. Hindustan Unilever, Kotak Bank, Bharti Airtel, Mahindra & Mahindra and ITC were the other notable gainers.

Also Read: Weekly Outlook: Nifty completes 61.8% recovery of bear market fall; Bias remains positive

The Sensex has started the week on a negative note, and as per the weekly Fibonacci chart, the bias may remain negative as long as the BSE index sustains below 35,171. On the downside, the BSE index has slipped below the weekly S1 (34,710), hence it is possible that the BSE index may extend some it’s losses by sliding towards the weekly S2 or S3 at 34,565 and 34,425, respectively. On the positive front, sustained trade above 35,171 can trigger smart gains.

As per the daily Fibonacci charts, on Tuesday, in case of an up move the BSE Sensex may face resistance around 35,100-35,145-35,190, and in case of a down move, the BSE index is likely to seek support around 34,820-34,775-34,730.

The NSE Nifty seems to be in consolidation mode, post recent smart gains. The NSE index is expected to trade in a broad range – 10,500-9,800, with near support around the 20-DMA (Daily Moving Average) at 10,120, followed by the 100-DMA around the 10,000-mark. The short-term bias is likely to remain bullish as long as the Nifty sustains above the 10,000-mark. On the upside, the NSE index needs to break and close above the 10,500-level for further gains.

Among the key momentum oscillators on the daily charts, the Slow Stochastic is on the verge of giving a fresh positive crossover. The DI (Directional Index) continues to remain in favour of the bulls, while the MACD (Moving Average Convergence Divergence) and the 14-day RSI (Relative Strength Index) are in neutral mode.

Disclaimer: The views expressed in this article are personal and for information purpose only, it does not advocate any buy or sell /recommendation.