Future outlook Tracking the mixed global cues, the Indian equity market had a decent start to the week. However, there was no follow-up buying around the 18000 level and prices slipped lower throughout the session. As the week progressed, the sell-off exaggerated once the 17800 support was broken and like a tumbling house of cards, there was selling in the broader markets. Eventually, after five days of continuous weakness, the prices had the lowest close in the last four months to end a tad above 17450 with a weekly loss of more than 2.5%
During the mid-week, US bourses turned catalyst to break some important support levels in our market, and from there as the bears got the grip on the market, they refused to give up. After the major traction seen on the Union Budget Day, the entire February month has traded in a range and after failing to hold the higher end of the range the prices have now slipped towards the lower end. Technically, if we see, this lower end around 17400 – 17350 coincides with an ascending trendline and 200SMA support. This set-up of support is visible in all the major indices and hence the market is at a make-or-break level. Considering the oversold conditions, we remain hopeful that this key support will be defended and hence we refrain from creating fresh short positions over here. If in case the support is broken, then the 17200 – 17100 would be the next support to watch out for, where one can pick good quality propositions in a staggered manner. Immediate resistance is seen around 17600 beyond which some positive developments may trigger and for the tide to turn back in the bulls’ favor will have to close above 17800 on a sustained basis. With global uncertainty, volatility is likely to remain on the higher side and hence traders are advised to keep a tab on the mentioned levels and trade accordingly.