Market may remain volatile this week

Mumbai: The market is likely to remain volatile due to the expiry of May series futures & options contracts and also investor's focus now shifting to macroeconomic numbers, corporate earnings and global cues.

According to technical analysts, while the sentiment is on the bulls' side, breaking the high might be difficult. If there is any breakout, 13,000 levels might be the next targets and on the other hand, breaching below 11,590 might help the bears to push the price further down. The immediate support would be at 11,000 levels.

To continue the uptrend, the market has to close above the recently made lifetime high which is 12,040 level. If it happens, the price may touch the 13,000 mark.

On the downside, breaching below the 11,614 levels would help bears to retest the 11,250 mark. Technical indicators are showing positive sentiment.

Last week clearly saw the 'Mid-Cap' index moving up which was in a last phase of its time as well as price wise correction.

"Volatility will eventually come down and rationality will prevail. Benchmark indices might not give any direction next week but could face mild downward pressure and Indian markets will finally align with the global mood. As of now, a wait and watch approach should be followed by markets atleast till the Monetary Policy and Budget announcement by the newly elected Government, which might be a game changer," says Jimeet Modi, Founder & CEO, Samco Securities.

Investors must ideally avoid the large-caps as they are in the overvalued zone while selective beaten down the mid-cap and small-caps could be bought into, analysts said.

According to analysts, the market has already seen the mid-cap making a good leap from lows and expect further legs to unfold, which will eventually bring cheers to lot of investors.

"Going ahead, we may not see the similar kind of outperformance from previous index drivers and the focus is now likely to shift on mid-cap and small-cap universe as we expect the party to begin after a long underperformance," says Mr. Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking.

Although Indian indices attained new highs, certain sectors conspicuously were weak. FMCG, IT, metals and auto did not participate in the sentimental rally. That being the case, if these sectors cannot rally now when everything is up when else will they! Therefore, these four sectors are unlikely to run-up. On the other hand, PSU banks were the star performers during this quarter giving an indication that their time has come in Modi era-II.

The market, experts said, will move based on earnings visibility, economic policies and global sentiments and how their impact will be on corporate earnings will be the real guiding factor for the market in the long-run.

The market will be closely watching the fourth quarter GDP numbers expected on Friday. In fact, the country's GDP growth slipped to 6.6 per cent in third quarter of FY19. The economy had grown 7.1 per cent in the second quarter and 8.2 per cent in the first quarter, logging 7.6 per cent for the first half.

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