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As the market has already witnessed a sharp run-up and valuations appear to be quite stretched at the current level, profit-booking at these levels cannot be ruled out and therefore traders should be cautious at these levels.
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Dear Trader…
The bulls continued to dominate and posted noticeable gains, due to upbeat global cues and this week also the Indian market continued its momentum with bullish trend due to liquidity and economic recovery, after the recent rally, Key point to highlight is that, over past 6 weeks index has rallied 28 % that hauled stochastic oscillator in the overbought territory, indicating possibility of minor profit booking at higher levels cannot be ruled out. However, it should not be seen as negative instead it should be capitalized as an incremental buying opportunity.
The current up move is led by broad based market participation as the Nifty midcap and small cap indices have consistently outperformed the benchmark and rallied each, so far this month against gain of 3% on the benchmark Nifty, after resolving out of their long term falling channel breakout, indicating resumption of major up trend. The rejuvenation of the broader market rally has been supported by strengthening of market breadth, as currently 93% components of Nifty midcap and small cap indices are trading above their
On the front of COVID-19 cases, India has done better in comparison to most countries as the mortality rate in the country remained low and the recovery rates were high.
This month will be good as far as inflows of FII are concerned. There is a general view that, there will be more correction in the dollar index which will help flows coming into the emerging markets now, the US Fed will be in focus. Bond yields, dollar and rates may remain lower which will help emerging markets. This also seems to have given confidence to foreign investors.
The current up move is led by broad based market participation as the Nifty midcap and small cap indices have consistently outperformed the benchmark and rallied each, so far this month against gain of 3% on the benchmark Nifty, after resolving out of their long term falling channel breakout, indicating resumption of major up trend. The rejuvenation of the broader market rally has been supported by strengthening of market breadth, as currently 93% components of Nifty midcap and small cap indices are trading above their long term 200 days SMA compared to past two week’s reading of 90%.
Indications are in the favor of some consolidation in the index and it would be healthy for the markets. Nifty future has critical support at 13303 levels and its breakdown may result in further correction ahead. In the case of a rebound, the 13575-13606 zones would act as a hurdle. Defensive viz. FMCG, IT and pharma tend to do well during the corrective phase but traders should maintain caution in the selection of the stocks as seeing selective participation.
We are cautiously positive on the market but advice investors to have 30% of their portfolio in liquid assets so that it can be utilized when correction happens in the market.
Considering the scenario, we suggest maintaining a positive yet cautious approach and continuing with the stock-specific trading approach. Also, keep a close watch on global markets and earnings announcements for cues.
As the market has already witnessed a sharp run-up and valuations appear to be quite stretched at the current level, profit-booking at these levels cannot be ruled out and therefore traders should be cautious at these levels.
Now, the Nifty future has to continue to hold above 13474 levels to witness an up move towards 13575-13606 levels while on the downside major support exists at 13404 levels.
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INDEX MOVEMENT – 14.12.2020
Nifty Future has resistance at 13547 – 13575 Point; above which other resistance levels are at 13606 – 13636 Point with highly Volatile Trend,
Nifty Future has Downside support levels are at 13474 – 13434 Point; below13434 Point, other support levels are at 13404 – 13373 Point.
I am positive for the next bullish trend only above @ 13606 Point but be with the trend. Let the market decide further moves.
As we are saying from many days, Buying is suggested in falls only...and it’s still a better strategy in the given Scenario.
Regarding Long term positions, it is preferable to remain cautious now.
If Nifty Future crosses @ 13606 Point, again then the upper side target is quite high and it may touch @ 13636 Point in the short term.
Note :- Before Act please refer & agree Terms & conditions, Disclaimer, privacy policy & agreement on www.nikhilbhatt.in
Bank Nifty Future has resistance at 30676 – 30737 Point; above which other resistance levels are at 30808 – 30888 Point with highly Volatile Trend,
Bank Nifty Future has Downside support levels are at 30535 – 30474 Point; below30474 Point, other support levels are at 30414 – 30303 Point.
I am positive for the next bullish trend only above @ 30808 Point but be with the trend. Let the market decide further moves.
As we are saying from many days, Buying is suggested in falls only...and it’s still a better strategy in the given Scenario...!!!
Regarding Long term positions, it is preferable to remain cautious now.
If Bank Nifty Future crosses @ 30808 Point, again then the upper side target is quite high and it may touch @ 30888 Point in the short term.
Note :- Before Act please refer & agree Terms & conditions, Disclaimer, privacy policy & agreement on www.nikhilbhatt.in
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.