The benchmark index is likely to see an upside rally based on technical indicator next week as it has moved above the prior swing highs and immediate resistance of 17,285 level on Nifty on the daily chart.
The bullish technical indicator along with COVID-19 situation in Asia’s third-largest economy and its economic data to be released in the coming week will decide the course of the market.
Though the index has been trading in falling channel formation and facing resistance from the upper band of formation, we believe that crossing above the same can show upside rally in the counter.
The Nifty index has also confirmed the bullish Marubozu candlestick which suggests strength for an upcoming week on the four-hourly chart.
The benchmark index has also been trading above 21 & 50-HMA which suggests strength in the counter.
At present, the Index has support at 17,000-levels while resistance comes at 17,500-levels on a weekly basis, crossing above the same can show 17,700-18,000-levels.
Last week, Indian equity benchmark indices gained by 2 percent amid broad based buying across sectors as investors continue to pile up position in beaten down stocks by shrugging off the rising concern of COVID-19 spread and imposition of restrictions.
Market participants were further cheered by the positive global cues amid easing fear over severity of Omicron variant coupled with strong economic data of US economy.
S&P 500 index reached record high levels last week as US jobless claims drop, indicating no adverse impact of Omicron yet. Large gains in domestic equity benchmarks were primarily led by gains in banking, IT and pharma stocks. Pharma stocks remained under investors buying radar due to recent surge in COVID-19 cases.
Top losers last week
Nifty losers | CNBCTV18
Top gainers last week
Nifty gainers | @CNBCTV18
Titan: Shares of jewellery giant Titan gained 8.54 percent this week as fears over the Omicron variant subsided. The company has witnessed margin expansion in a volatile period which further boosted sentiments for the stock.
Sun Pharma: The stock gained 7.59 percent over the week on the back of recent drug approvals received in the US, and announcement of setting up a new manufacturing plant in Andhra Pradesh.
Eicher Motors: Shares were up 6.16 percent as the company is witnessing demand revival in its commercial vehicle division. Sales are close to pre-pandemic levels despite ongoing pandemic and semi-conductor shortage in the industry
Dr Reddys Laboratories: Shares of the pharma giant rallied 5.76 percent during the week as the company received approval to launch Molnupiravir in India, which has uses in the treatment of COVID-19. Additionally, the company distributes the Sputnik vaccine in India, which is in focus due to the surge of the omicron cases in the country.
Divi’s Lab: Shares of Divi’s Lab gained 5.17 percent as the pharma sector has come into light again due to the spread of the omicron variant in India.
(Ankit Pareek is Research Analyst at Choice Broking)
