What a year this is turning out to be. The twin forces of greed and fear are alternately manifesting themselves, making equity markets surge in mindless euphoria one week and cave in with unnecessary panic in the next.

What makes life difficult for market analysts is that the news or event that makes market ecstatic in one session can make it go into a deep depression in another. It was the European Central Bank’s announcement that it would expand its bond re-purchase program to €60 billion per month that sent the Sensex and the Nifty soaring.

But a weak euro, which is the direct fallout of this move, will hit our services sector that is a net exporter to the euro zone (our trade in goods and commodities is almost balanced with this region).

The FDI and FPI flows from this region will also be affected as the region grapples with a slowing economy and deflation.

But markets celebrated on the expectation that the additional liquidity being injected into the financial system will move into high-growth emerging markets such as India.

The week ahead promises to be equally exciting for Indian investors, despite the market holiday on Monday. The Greece elections to be held on Sunday will determine the opening trades of the week. If Syria wins, it will send a ripple of nervousness among financial markets as the coalition is making noises about ending the austerity measures imposed on Greece since 2010. But a major upheaval and Greece exiting the European Union is unlikely despite the rhetoric, so any turbulence caused by this event is likely to be short-lived.

The US President Barack Obama’s visit and any deals coming out of that will also be of interest. The FOMC meeting and the stance taken by the Federal Reserve after the ECB’s largesse will also determine the global equity market sentiments.

Rupee has been unusually strong. The movement of the Indian currency, the bond yields and FPI flows into equity and debt market will also give us clues about the medium-term trajectory of the market.

Both the benchmarks have closed at a new high last week. The bullish engulfing candle in the monthly Sensex and Nifty charts also signals that the correction that is in progress since December has ended.

Sensex (29,278.8) It was yet another strong week for the Sensex with the index closing 1,156 points higher.

The week ahead: The short-term momentum is in favour of the bulls.

Immediate support that needs to be watched is the previous peak at 28,808.

As long as the index holds above this level, short-term traders can continue to buy in declines.

Targets on move below 28,808 are 28,413 and 27,812. The second support is an important short-term trend-deciding level since the 50-day moving average is also poised there.

If the index continues moving higher, immediate targets are at 29,709 and then 30,209.

Medium-term trend: After gyrating between 26,500 and 28,000 since December 10, the index is once again in an uptrend. This confirms our view that the Sensex is in the final stages of the move that began in August 2013.

As explained in our yearly view, the index has the potential to move up to 32,000 in the early part of the year. But it will get quite choppy thereafter.

Immediate medium-term support stays at 26,450.

Nifty (8,835.6) It was strong week for the Nifty too with the index less than 2 per cent away from the 9,000-mark.

The week ahead: The three ascending stars in the Nifty formed from Wednesday seem to denote another running correction. Short-term investors can buy in declines as long as the index trades above 8,627.

Targets on a breach of this level are 8,563 and 8,490. Short-term trend will turn negative only on close below 8,500.

On the other hand, if the index continues moving higher, immediate targets are 9,093 and then 9,112.

Medium-term trend: We retain a positive medium-term view for the Nifty. If the Nifty surges past 9,000, next targets are placed at 9,290 and 9,405.

Positive medium-term view will be retained as long as the Nifty trades above 8,000.

Global cues It was a week when most global indices took wing and closed on a very strong note.

The European benchmarks led the way with the CAC, DAX and the FTSE closing between 4 and 6 per cent higher, buoyed by the fillip their economies were expected to receive from a weakening euro.

The CBOE volatility index declined almost 20 per cent reflecting the improving investor sentiment.

The movement in the Dow was, however, quite muted. It recovered above the support at 17,240.

This implies that the move that the recent uptrend can continue, to take the index to 18,500. The short-term view will turn negative only on a close below 16,732.

It is not just the Indian benchmark that moved to record high last week. Benchmarks of Indonesia and Malaysia too have hit new highs last week as risk appetite increased.

comment COMMENT NOW