Market set to witness consolidation phase

The equity market recorded a small gain in a truncated week, is the second consecutive weekly gain in two months. Bearish move in Crude oil and some recovery in Rupee helped the major indices to be in positive territory. The Sensex gains 0.42% and Nifty rose 0.31 per cent.

The Federal Reserve's guidance on interest rates, dampen the sentiment in global markets as well as domestic markets. The crude oil fell below $70 mark on Friday and entered in to bear phase. It may have some positive impact on Market in short term.

The tussle between RBI and Government is shaping into some kind of egoistic war for finances. The outcome of RBI' board meeting on the 19th of this month, will certainly have an impact on the economy and markets.

The market is closely watching the developments and very much keen on Governor Urjit Patel move on his continuation. The Government is very particular about the RBI reserves share and intends to make changes in RBI's reserves and dividend policy. The liquidity crisis is still impacting the finances of NBFCs. The market is awaiting the CPI data and other data points.

Technically, the major indices move in a narrow range within the consolidation zone. Last week's fewer trading session did not provide any reversal signals. It still below the 200 DMA and other major indicators are not changed. In the last three trading sessions, Nifty formed all indecisive candles, indicating tiredness in bulls. If the Nifty moves above 10710, the new swing high will form.

And there is every probability is there to form lower swing above the recent low around 10,000. As we said earlier the market will consolidate between 10,000 -10,710 for a period. This consolidation phase will sustain for at least 4 weeks, of which two weeks already have gone.

So, expect a lower swing next towards 10400-10,350 zone. Be Cautious with the volatility. Next two weeks are very important to the market for future direction. (The Hans Research Team)