Nifty may consolidate between 10,200 to 10750

Indian equity market snapped a five-week losing streak after experiencing a huge volatility. The major indices closed one per cent higher with the help of pullback in heavily corrected index heavyweights. During the week amidst high volatility, global factors impacted the market sentiments.

The rupee is a still a worrying factor for country's economy though it recovered in last three days. Crude oil prices are also cooled off from highs of $80 per barrel. Industrial output and inflation data were announced on Friday after markets hours. Both are not encouraging. With Q2 earning season just beginning, markets will wait for some cues from earnings space before reacting. 

Globally, the all major indices are in bearish mode. Technically, as we said earlier, the 10,200 is working as support zone for the Nifty, which exactly from where it bounced formed bullish hammer candle on weekly basis.

This is a long-term trend line support drawn from February 2016 low to December 2016 low. As long as 10,200 level is not broken, Nifty may reach 10,615 and 10,758 levels, where the index will encounter strong resistance.

The Nifty witnessed a sharp decline of more than 13 per cent in last six weeks which has led to an extremely oversold zone and hence a pullback from the oversold territory was seen on Friday's session. Nifty may consolidate between 10,200 to 10750 range for next few weeks before taking a decisive direction.

The leading indicator RSI is at the historical support level and other indicators are also trying to come out of the oversold zone. FIIs sold Rs. 17,857.56 worth equities in this month and the trend will continue. Next week is going to be crucial as five index heavyweights are declaring their earnings. We can experience more stock specific activity and the market will consolidate in a zone. (Hans Research Team)