The Nifty50 ended up higher on Friday on followup buying following a reversal pattern last week. It reversed from its crucial moving averages.
The comeback of the bulls was led by positive cues coming in from global markets, and the benchmark indices continued to flourish near all-time highs.
Some strong domestic cues helped as well. A rating upgrade from Moody’s lifted investor sentiment and the momentum turned positive. A follow-up rating upgrade of select few largecap stocks also helped sentiments in the short to medium term. The market now is glued to S&P ratings, which will be released over the weekend.
A clear reversal pattern along with the 20-day SMA at 10,100 zones pushed the market higher while follow-up buying was also seen. The week started with a buying momentum in strong sectors such as PSU banks, reality, infrastructure and IT.
The Nifty50 saw short-term support being held in its overall bull rally at 10,300 level, where the 20-day SMA is placed on the daily chart.
Consecutive consolidation in a stiff range for a brief period and sustaining the support level also helped the momentum as the bulls defended the 10,300 level.
The longer the consolidation, the stronger the momentum for the next round of upside and the same is the scenario in the short term.
On the derivatives front, strike price 10,300 was very active, as writers created a strong support. On the higher side, higher activity was seen at strike prices 10,500 and 10,600. So broadly, the range is still intact at these strikes and there could be further upside for the bulls in the forthcoming week.
The coming week will be full of action, as it may also increase volatility and the market may see some major moves. Eyes will be glued majorly to the S&P ratings, which will be released over the weekend, GDP data to be released on Nov 30 (Thursday) will be of high importance too.
A lot of things will contribute to the future course of action, including GST rollout, infrastructure output, the federal budget and fiscal deficit will be of high importance.
Rising crude oil prices may also have some implications and alter the government stance and could also contribute to the government’s fiscal imbalance.