Sensex week ahead: No big spurt likely; media, infra, pharma stocks to do better

Despite an attempted breakout during the week gone by, Friday’s session remained subdued as the market consolidated on the expected lines. We had expected the benchmark Nifty50 to post modest rise in line with this analysis; the Nifty ended the week with net gains of 112 points or 1.10 per cent on a weekly basis.

The market did attempt to break out of the broad trading range, but still saw no convincing gains after that. This coming week, we expect the market to keep hitting marginal highs, but any serious rise may still continue to elude us.

The coming week is likely to remain stock specific in nature. The 10,360 and 10,490 levels will play out as immediate resistance area. Supports will come in at 10,200 and 10,060 levels.

A study of Relative Rotation Graphs or RRG showed while metal stocks continued to outperform relatively, the momentum fizzled out. The coming week will see sharp relative outperformance from media, infrastructure and pharma stocks. Energy stocks are likely to lose momentum. No significant outperformance is expected from PSU and private banks. While FMCG, services and realty stocks will consolidate, the broader midcap universe will see select outperformance. Some momentum may also be seen in auto stocks.


Important Note: RRGTM charts show you the relative strength and momentum for a group of stocks. In the above chart, they show relative performance against the Nifty Index and should not be used directly as buy or sell signals.

(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at milan.vaishnav@equityresearch.asia