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The Indian stock market is booming in every sector due to the relentless influx of foreign investors. Traders with a stock specific approach are more likely to book profits through intraday trading.
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Dear Trader…
As expected after a gap up opening at record high Indian benchmark equity indices witnessed profit booking on higher levels as heavyweight stocks such as ITC, Reliance Industries and Bajaj Finance witnessed sharp profit booking. Those apart, weak global cues heavily weighed on the investor sentiment.
Markets were trading highly volatile during the day, as traders were cautious with the World Bank in its Global Economic Prospects report has stated that India's economy is estimated to contract by 9.6 per cent in the fiscal year 2020-21 (FY21), reflecting a sharp drop in household spending and private investment. Report said that the informal sector, which accounts for four-fifths of employment, has been subject to severe income losses during the COVID-19 pandemic. In India, the pandemic hit the economy at a time when growth was already decelerating. Traders also took note of a Reserve Bank paper stating that an increase in credit may not always find its way towards investments as business entities may use credit lines to finance their current liabilities.
European stocks were steady early but U.S. stock futures slipped as investors closely monitored the Georgia elections, in which the Democrats moved closer to a Senate majority. With a potential Democrat majority raising the prospect of further stimulus, the U.S. 10-year Treasury yield climbed above 1% for the first time since March, while the dollar fell.
Asian shares were mostly lower Wednesday as swelling virus counts, Hongkong crackdown and China-U.S. tensions weighed on sentiment. Meanwhile, IHS Market’s survey showed economic activity in the euro zone contracted more sharply than thought at the end of 2020 and could get worse as renewed lockdowns hit the bloc’s dominant service industry.
The Indian stock market is booming in every sector due to the relentless influx of foreign investors. Traders with a stock specific approach are more likely to book profits through intraday trading. In a bullish mood in the Indian stock market, investors as well as traders are showing enthusiasm and caution. The Nifty and the Sensex have managed to maintain their bullish mood with a slight intraday correction with each rebound.
Despite Corona's worries in India as corona transition is on the rise again in the world, positive reports on corona vaccine development and now that the situation is expected to stabilize rapidly in the current calendar year 2021, foreign funds are looking at India's economic growth Buyers have been, but at a time when the Indian stock market is currently in an overbought position, caution will be needed in buying stocks in the wake of this record rally.
Nifty is trading above its 20 day SMA which indicates positive bias in the short term. Nifty continues to remain in an uptrend in the medium and long term, so buying on dips continues to be our preferred strategy. The strength indicator RSI has turned positive from the oversold territory and is above its reference line indicating sustained uptrend.
The trend deciding level for the day is 14202. If NIFTY future trades above this level then we may witness a further rally up to 14232-14272 levels. However, if NIFTY trades below 14144 levels then we may see some profit booking initiating in the market, which may correct up to 14104 to 14044 levels.
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Ø INDEX MOVEMENT – 07.01.2021
Nifty Future has resistance at 14202 – 14232 Point; above which other resistance levels are at 14272 – 14303 Point with highly Volatile Trend,
Nifty Future has Downside support levels are at 14144 – 14104 Point; below14104 Point, other support levels are at 14044 – 14004 Point.
I am positive for the next bullish trend only above @ 14232 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 @ 14232 Point, again then the upper side target is quite high and it may touch @ 14272 Point in the short term.
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Bank Nifty Future has resistance at 31933 – 32008 Point; above which other resistance levels are at 32188 – 32232 Point with highly Volatile Trend,
Bank Nifty Future has Downside support levels are at 31777 – 31606 Point; below31606 Point, other support levels are at 31474 – 31313 Point.
I am positive for the next bullish trend only above @ 32232 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 @ 32232 Point, again then the upper side target is quite high and it may touch @ 32303 Point in the short term.
Note :- Before Act please refer & agree Terms & conditions, Disclaimer, privacy policy & agreement on www.nikhilbhatt.in
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