According to technical analysts, the Nifty50 is continuing its corrective fall with intermittent rallies which is later met by declines.
Mumbai: The market is likely to remain choppy this week on June series F&O contract expiry and the progress of monsoon.
Apart from that macro factors like May fiscal deficit data and infrastructure output numbers that will be released this week would gauge the economy’s performance.
Any delay in the progress of monsoon may cause jitters in the market. The India Meteorological Department (IMD) has said that the overall monsoon deficiency in the country has reached 43 per cent due to its sluggish pace.
What is causing worry is the selling by institutional investors as FII outflows totaled $65 mn for the past five days, while DII inflows stood at $181 mn for the same period.
"Going ahead, the markets would continue to consolidate and may react to geopolitical tensions (in Iran), Crude prices and monsoons. Also, the Union Budget is round the corner. We advise investors to avoid speculative trades, as there has been significant increase in stocks that are making wild moves. At this juncture, investors need to be selective in stock picking," said Sanjeev Zarbade, VP PCG Research, Kotak Securities.
According to technical analysts, the Nifty50 is continuing its corrective fall with intermittent rallies which is later met by declines. Once 11,600 is broken, the next likely support point would be 11,400 in Nifty50 which is also the gap which should get filled for the markets to again begin a healthy rally. Time Cycle correction suggests that budget could be a turning point for the markets which would coincide for the market taking support at the lower trend channel. Avoid trading in this corrective market.
"Friday's decline was a bit unexpected for us; but we still remain hopeful and expect the index to breakout from the key hurdle of 11,843.50. This would unfold the fresh upward leg of the rally to test 12,000 first and then possibly fresh record highs soon. This optimistic approach remains valid as long as we are trading above the sheet anchor support of 11,630 - 11,591," said Sameet Chavan, Chief Analyst-Technical and Derivat-ives, Angel Broking.
"The way 'Mid-Cap' Index is shaped up, it clearly grabs our attention. The weekly chart looks extremely promising and soon we will not be surprised to see a strong rally unfolding in this universe. But still traders are advised to be a bit fussy when it comes to stock selection.
“It's better to stick to quality Mid-Caps that are likely to give decent moves and should ideally avoid such consistent draggers despite giving eye-popping rebounds," he further said.