Sector rotation in focus: Where to find opportunities in a sideways market
Nifty remained largely on a declining trajectory, except for the last trading day where it saw some relief rally from the lower levels. Following a strong weekly decline of 1167 points two weeks ago, the Nifty has thereafter traded relatively in a lesser range but has by and large exhibited a weak bias. The trading range this time remained similar to that of the previous week; the Nifty oscillated in 644 points over the past five days. The volatility remained stagnant; the India VIX came off by 1.38% to 13.04 on a weekly basis. While continuing to find short-term pattern support, the headline index closed with a net weekly loss of 110.20 points (-0.44%).
Many important levels have been tested over the past week; a few important levels need to be watched as well. The Nifty tested the 20-week MA, which currently stands at 24657. The 100-Day MA is currently at 24507. This makes the 24500-24650 a very important support zone for the index. On the other hand, the derivatives data show a maximum accumulation of Call OI in the 25000-25100 range, making these levels an immediate resistance area for the markets. This is likely to keep the markets in a capped range; if the technical rebound extends itself, it is likely to find resistance in the 25000-25100 zone. In the same breadth, markets would get weaker if the 24650-24500 zone is violated on the downside. So long as either of these ranges are not violated, expect the Nifty to oscillate back and forth in a defined range.
A quiet start is expected to the coming week; the
