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Below is the Weekly Market Note By Mr. Ajit Mishra, VP - Research, Religare Broking Ltd

Markets remained volatile for yet another week and managed to end flat amid mixed cues. The tone was negative in the first half, mainly pressurized by weak global cues however recovery in the final sessions pared losses and helped Nifty to settle around the week’s high at 19,653.50 levels. Meanwhile, mixed trends on the sectoral front kept the traders busy wherein realty and IT posted strong gains while energy, pharma and metal were among the top losers. We had a similar trend on the broader front as the midcap index ended in the red and smallcap gained over half a percent.

Though we have seen a marginal respite, sentiment is still bearish on the global front. Among the key markets, the US indices have been inching gradually lower and its benchmark index, the Dow Jones Industrial Average (DJIA) has breached the crucial support of 33,200. We feel oversold indications may prompt some rebound in between but the existence of a hurdle around 33,700-34,000 zone would cap the upside. With no support from the global indices, it would be difficult for our markets to maintain the recovery tone.

Nifty had failed to cross the hurdle short term moving average (20 EMA) in the recent past and we are again hovering around the same area. A decisive close above 19,670 could help the index to extend a rebound toward the 19,800-20,000 zone. On the downside, the 19,200-19,450 zone would continue to act as support, in case of a reversal. The surge in select IT majors ahead of their earnings is certainly encouraging but others are still not offering any clear signals. Besides, we are seeing early signs of exhaustion in the broader indices, especially in the midcap index. Considering all, traders should stay focused on stock selection and prefer index majors over others.

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