Home / Budget / Budget Expectations /  Sensex and Budget: Will the trend continue?
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Indian equity markets are continuing their northward journey with three back-to-back strong weeks where Nifty and Sensex closed with a gain of around 2.5% last week. The earnings session kicked off with major IT names with mixed to positive notes and next week also going to be an important week in terms of earnings where we will react to HDFC bank's numbers on Monday while Ultratech Cement, Bajaj Auto, Asian Paints, Bajaj Finserv and HUL will come out with their earnings during next week. 

The pre-budget move has started in many pockets and that is likely to continue in next week as well. Global markets are showing some volatility that will have some impact on our market as well. Covid cases are rising but the market is complacent about Covid cases as the hospitalization and mortality rate is low. The market is likely to remain volatile ahead of new all-time high amid Q3 earnings, global cues, and pre budget expectations.

If we look at the trend of last three years then market starts to correct between 15-20th January then we see a big post-budget rally in the market. It will be interesting to see how the market will approach Budget 2022.

If we look at the data then FIIs' long exposure in the index future stands at 66% while the put-call ratio is sitting at 1.25 level that is neutral to positive for the market. OI distribution is showing the highest OI at 18000 strike call option while 18200/18000 put strike prices are having the highest open interest and may act as immediate support levels.

Technically, the market is in strong bullish momentum where 18300-18350 is a minor resistance area; above this Nifty is likely to head towards a fresh all-time high. On the downside, 18050-17950 is an immediate demand zone while 17800/17650 is major support levels.

Bank Nifty is facing some resistance at 61.8% retracement of the previous fall from the high of 41829 to the low of 34018 however overall structure is bullish and if it manages to take out 38900-39100 resistance zone then we can expect a rally towards 40000/40500 levels. On the downside, 38000 is an immediate support level while 37500/37000 is the next support levels.

(Santosh Meena is head of research at Swastika Investmart Ltd.)

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