Nifty going through phase of consolidation

The market rebounded sharply in the late session on Friday with the Nifty closing above 11,750 mark as global crude oil prices fell after having surged above $75 a barrel.

The Sensex was up 336 points at 39,067, while Nifty gained 112 points to end at 11,754.70. About 1085 shares have advanced, 1410 shares declined, and 153 shares are unchanged.

Tata Steel, BPCL, GAIL, ICICI Bank and JSW Steel were the top gainers on the Nifty, while Tata Motors, Bajaj Auto, Grasim Industries, Dr Reddy's Labs and Bharti Airtel were the major losers.

Among the sectors, except auto all other sectors ended in green led by metal, bank, energy, IT, pharma and FMCG.

The Markets during the week traded largely sideways with an upward bias although the Nifty went up during the week; but the Small-Cap and Mid-Cap Indices were still languishing indicating that the markets are in no hurry to set a decisive path for themselves yet.

A mixed sentiment from the quarterly results of companies kept the markets on its toes this week. Among the banks, HDFC bank, Axis Bank and AU Small Finance Bank gave strong bottomline growth.

A fourth straight week of consolidation as the Nifty is oscillating between 11,550 - 11,800 amid uncertainty, heightened VIX, Lok Sabha Elections and Rising crude oil. All this points to a Tug of war scenario between bulls and bears.

Market View
It was a fourth straight week we have seen the Nifty strolling between 11,550 to 11,850. The Nifty bank was on the contrary down with some marginal loss. VIX is trading above levels of 21. This is a clear indication of Divergence in sentiments of bulls and bears. This also points to weak breadth we have observed. With Expiry of the series this week, it was a play ground for option writers who used volatility in their favor to eat the premiums.

"There are few factors that are keeping the upside as an opportunity for bears. Importantly it is the crude oil that is at 5 months high. Secondly a rebound in Dollar and its stellar performance in last few days against basket of currencies. USDINR further was seen inching above 70.5 levels. Rupee depreciation kept investors sentiment muted as well," Mustafa Nadeem, CEO, Epic Research said.

Technical View
According to analysts it will be crude oil that will be driving the market as well as rupee. The movement of rupee is seen critically as it is now above 70.5 and technical are further pointing to some upside space of 71.7.

"Now, at his juncture, we do not have signals that will provide us a proper trade set up. But since the broader trend remains bullish, we continue to remain upbeat on the market as long as it holds 11,549, convincingly. On the higher side, 11,800 followed by 11,856 are the levels to watch out for. If we see any renewed buying interest in some of the heavyweight constituents, we would expect index hitting fresh highs very soon. Till the time, the consolidation continues in the range of 11,856 - 11,549," said Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking.