Volatility to persist across markets amid unstable technical structure: Rajesh Palviya

Synopsis

Nifty is consolidating between 24,500 and 25,200, with 25,000 acting as resistance. Bank Nifty underperforms, potentially falling to 55,000 if it breaks 55,500. Crude oil prices are spiking due to geopolitical tensions, with $76-$78 as the next hurdle and support at $68; a break above $78 could lead to $86-$88.

"If Nifty at all crosses above 24,800-24,850 zone, then we could see some bit of short covering to trigger in Nifty trades and then this pullback can extend further towards 25,000. But overall, 25,000 may act as a stiff resistance for any pullback in the near-term perspective," says Rajesh Palviya, Axis Securities.

What are the levels to watch out for really and as far as Nifty is concerned.
Rajesh Palviya: So, since last four-week Nifty is consolidating in range only, 24,500 on the downside and 25,100-25,200 is the upper band for this consolidation. Again, every week we have tested both the levels during the volatility which we have witnessed in last couple of weeks. Again, now Nifty slipped below to 20-day moving average. Nifty has broken the major put based concentration wall at 24,800, so if it remains below to 24,800, we might see Nifty to consolidate it lower band like 24,400 to 24,800 would be the range for Nifty in the coming week. If Nifty at all crosses above 24,800-24,850 zone, then we could see some bit of short covering to trigger in Nifty trades and then this pullback can extend further towards 25,000. But overall, 25,000 may act as a stiff resistance for any pullback in the near-term perspective.

Volatility is going to remain in the market in the today's session as well as the previous day was also witnessing the same kind of behaviour.

So, we may see a volatile trading sessions going forward for next couple of days. Bank Nifty is little underperforming indices in this week and Bank Nifty has broken the important support area of 56,000. So, if it remains below to 56,000, the range for the Bank Nifty for coming week would be 55,000 to 56,000 and bias would be slightly on the bearish side for Bank Nifty until the Bank Nifty not crosses above 56,000 level, most of the gain which we have witnessed post RBI policy is almost gave up by the Bank Nifty now and now Bank Nifty is trading near to the critical support area of 55,500. So, any move below 55,500 may attract a more supply pressure and then possible down move can extend to 55,000 for Bank Nifty.

We spoke about gold, but there are other prices that have been spiking up is the Brent crude, that is up almost 12% in this week. In fact, it is sitting at $73 a barrel. Now, of course, on the back of the heightened geopolitical tensions, the supply concerns and so on, there is a note by JPMorgan also that says that crude could touch $130 a barrel in worst case scenario. Do you concur and what is your view own crude and, of course, then therefore the sectors that are crude sensitive?
Rajesh Palviya: So, because of this geopolitical tension yes, there is spike in crude prices. But looking at the weekly as well as the monthly setup on the technical side, $76 to $78 is the immediate hurdle for the crude. If at all crude manages to cross above $78 and sustain above those level, then yes, maybe this spike can extend further and then 86 to 88 would be the next target. But it all depend on what kind of escalation we are going to have in coming days, that is the major driver for this crude oil prices. But on the downside 68 is the immediate support area. If it breaks below 68, then yes, unwinding trade would take place in crude prices. But till it is trading above $68-69, there is a possibility that again the crude can move back to the 78 level and if it crosses 78, 86 to 88 would be the next target for crude.

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