The earnings season is underway and the markets have reacted by putting in a 100 point range.
Well not totally unexpected as overall the results have been good with "beats" exceeding "misses". On the back of FII sponsored liquidity and government reforms, the markets have held on to their gains awaiting the next trigger.
That trigger could be the RBI event tomorrow.
Though more people are asking for status quo to be maintained, markets by large have priced in a 25 basis point cut in the CRR.
The CRR cut whilst bolstering liquidity will help banks earn more from the money it has and propel rate sensitives like realty and autos to move forward.
However the important thing about tomorrow will be to see if the rate cutting cycle paused in January comes back to life again.
This should have far reaching effects on most stocks, the bank Nifty in particular.
Here's how it shapes up ahead of tomorrow :
The chart above is the BankNifty composite of the spot.
It shows the market achieving balance at 10416 twice and a move above 10664 not sustaining.
Roughly 10416 and 10664 remain the outer boundaries for the market to think about it's next move.
Today's upmove got stalled at 10580 which is the upper POC of the profile on the right.
The biggest level to watch tomorrow will be 10416 where a breakdown can send the market to 11250/ 11270 in a hurry.
Bias remains positive above this point and will cement the positive momentum if 10580 gets taken out along with 10664.
That's it- just 3 levels and you should be on track for whatever the RBI does tomorrow.