Sensex, Nifty look to resume upward march; 5 things to know before today’s opening bell

Sensex and Nifty will today open for trade for the first time this week, looking to pick up from where they left off. S&P BSE Sensex now sits just above the 49,000 mark while the Nifty 50 index is just above 14,507. While analysts do expect some bounce back on stock markets after the sharp fall seen earlier this month, the holiday-shortened week is also expected to bring some volatility. India VIX, the volatility gauge, slumped 9% on Friday to close near 20 levels after having surged over 22 during the previous week. SGX Nifty was up 30 points, hinting at a positive start for equities.

Global markets: While Dalal Street was closed on Monday, global markets saw mixed trading. On Wall Street, Dow Jones gained while NASDAQ and the S&P 500 slipped. On Tuesday morning, Shanghai Composite was down in the red along with Nikkei 225, and TOPIX. While Hang Seng, KOSPI, and KOSDAQ gained.

What do the charts say: After Friday’s jump the short-term trend for Nifty seems to have been reversed, according to Nagaraj Shetti, Technical Research  Analyst, HDFC Securities. “Nifty on the weekly chart has bounced back from the weekly 10 period EMA in this week. The moving average is now at 14590 and the Nifty closed just below it, as per week’s close. Previously, such downside violations of this EMA has offered strong upside bounce in the subsequent weeks in past,” he added.

Support and resistance levels: For Nifty the next levels to watch out for, according to Nagaraj Shetti is 14,700. He adds that a sustainable move above that could open further upside in the near term. “On Thursday, the market stopped at a large support area and formed a bullish pattern today, which give us an indication that the coming week may be positive for the market,” said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities. He added that if Nifty holds above 14,250 it could surge to 14,750-14,900.

FII and DII trades: Foreign Institutional Investors (FII), after having flooded domestic markets with funds this fiscal year, have recently gone soft. FIIs were net sellers of domestic stock during the entire previous week. Domestic Institutional Investors (DII) meanwhile have been net buyers on four of the last five trading sessions.

IPO watch: Rakesh Jhunjhunwala-backed Nazara Technologies will list on the bourses today. Recent listing have been tepid but shares of Nazara Technologies have been commanding a strong premium in the grey market and have a strong business profile which could help it list at a significant premium.