Weekly Market Outlook for 27 Feb to 3 Mar

Both Nifty as well as Bank Nifty index corrected last week without any pullback move as the broader markets witnessed selling pressure. Nifty breached its important support of 17800 during the week which led to selling pressure and it ended below 17500 with a weekly loss of over two and a half percent.

Nifty Today:

It was a tough week for the weeks as the markets did not see any upmove during the week and Nifty ended in the red for sixth session in a row. FII’s have rolled over their short bets in the index futures segment to the March series as well and they have over 80 percent of the positions on the short side at the start of the new F&O series. This indicates their bearish stance for the short term. The momentum oscillator on both Nifty as well as Bank Nifty daily charts are in sell mode, but has reached the oversold territory on the hourly charts. Further, Nifty is approaching its previous low support zone of 17350-17400 which was low formed on the Budget day. Hence, although the momentum looks weak, a pullback move from this support zone is possible to relieve the hourly oversold set ups. During pullback moves, resistance would be seen in 17550-17650 range. Traders are also advised to keep a close tab on the Nifty Midcap 100 which exhibits the broader market strength. It has a strong support in the range of 29850-29900 where the index has frequently taken support in last six months. If the index breaks this support on closing basis, then it would be sign of further weakness in the broader markets.

Short bets by FIIs build pressure on markets

Looking at the above data and levels, it seems that although the data and momentum are negative, the risk reward is not favorable for fresh short formations here due to oversold set up. Thus, a pullback move from the above mentioned support zone is possible in the coming week to relieve the oversold set ups. 

Nifty & Bank Nifty Levels: