Charts are indicating indecisiveness among traders as the benchmark index has formed a Doji candlestick after forming the evening start on the weekly chart.
Moreover, the index has also faced a resistance from falling trend lines and showed profit booking from higher levels.
On the daily chart, it has failed to close above 17,200 level, indicating traders will opt to sell on rise. Immediate support of 17,000 has already been violated already, so next strong support would be on 16,800 followed by 16,600.
Short-term investors may opt for stock-specific action with positive bias. Indicators as MACD and RSI show negative crossover further indicating weakness in price action.
Overall, the Nifty index is having support at 16,800 marks while resistance at 17,550 followed by 17,650, while Banknifty support is placed at 35,500 followed by 35,200 and resistance at 37,200.
This week, market rebounded in the mid-week as a pull-back rally in global market lifted sentiments. However, the recovery remained short lived as benchmarks witnessed sharp sell-off on Friday after an aggressive and accelerated 50bps rate hike comment by the US Fed Chairman Jerome Powell.
On weekly basis, the benchmark index Nifty ended at 1.7 percent lower while the volatility index rose 0.38 percent on a weekly basis.
Sector-wise, Auto and Energy were the top gainers while IT and Financial services were the top losers.
Stock wise, Coal India, Reliance Industries, M&M, Maruti, and Eicher Motor were the top 5 gainers while Infosys, Hdfcbank, Tech Mahindra, Hdfc, and Hindalco were the top 5 losers for the week.
Fundamentally, volatility is expected to remain elevated in the next week over concern on inflation, geo-political development as well as the outcome of Q4 earnings.
Coal India: Coal India share price surges as high power demand and the high price of coal due to coal shortage benefit the company.
Reliance Industries: Reliance Industries share price surged on optimism over strong growth in its businesses.
Infosys/HDFC Bank: Stocks witnessed a selloff mainly on account of disappointing Q4 results.
(Sumeet Bagadia is Executive Director, Choice Broking)