Last week – review: We expected Indices to test upper end of the range, Nifty @ 17684 & Banknifty @ 38448. Indices manage to surprise positively and Banknifty closed above 39000 level.
Tuesday market will be reacting to HDFCBANK & HDFC merger approved by CCI. India’s inflation data came in line with market expectation. CPI came at 6.71% which will be taken positively by market.
Meanwhile any major announcement by PM on 15-Aug-22 could provide fresh cues.
Technical View
Nifty RSI @ 80.48 & RSI average @ 76.44. Nifty rallied 1.73% this week but RSI constantly remained above 70 level.
Nifty trend-line resistance from 18600 to 18350 & 18114 – shows resistance zone at 17775 and extension of Nifty rally started from 15858 could test 17885 which comes at 161.8% extension.
Banknifty RSI @ 80.09 & RSI average @ 75.84. It continues to trade in overbought territory.
Approach on Technical: Indices are in overbought zone and it can trade in over-bought zone for extended period before any significant correction. We are expecting another round of rally backed by short-covering & momentum to take indices higher before some correction.
Fundamental Insight
Q1FY23 result season concludes as most companies declare their result. Result season have seen some positive surprise with Mid-Cap & Small-Cap showing momentum continue as many stocks reclaim their level seen in April 2022.