Dear Trader…
The Indian stock market has seen an estimated budget rally of more than 3% in just four days, trading in the Indian stock market started with a modest decline but funds continued to buy in a row as the central budget continues to be important for the country’s overall growth, especially for a self-reliant India and incentives for various sectors including infrastructure, the BSE Sensex hit a new historic high of 50687.51 points and the Nifty Future hit a new historic high of 14938 points as the Indian stock market continued its budget rally.
Friends, The funds have continued their aggressive rally since the beginning of this week after seeing the expected big correction for the long-term health of the market last week.
Funds rallied today on the positive impact of budget incentives in the banking-financial sector, allocation of Rs 35,000 crore for corona vaccination program and other provisions as well as incentives for infrastructure.
With the Modi government’s commendable efforts to get the Indian economy back on track, foreign fund-foreign portfolio investors, who are seeing huge growth opportunities in India in the coming days, have become relentless buyers of stocks.
The current financial year has seen the highest influx of foreign institutional investors in the country for the first time since 2013, in the current financial year 2020-21, FPIs have so far invested an estimated. 31.70 billion in Indian equities, the highest since the 25.80 billion in 2012-13.
But as there are still many challenges on the economic front, the rise in stocks will still need to be cautious, the overbought position is likely to ease.
The overall momentum is quite strong on the back of huge inflows from FIIs for the month along with an appreciating rupee. Due to this, no major declines were observed in the Nifty.
The short-term technical condition of the market appears like a sideways correction is in the process while it is subject to further price action evolution, considering the volatile nature of markets with mixed technical signals on charts it looks prudent on the part of traders to remain neutral till weakness in the market are confirmed.
The overbought momentum readings on the lower time frame chart and divergence in the broader markets indicates stock specific action and thus, traders should be book partial profits after the recent rally and wait for any dip to re-enter in the index. Stocks, on the other hand, are offering opportunities on both sides so plan your trades accordingly.
The short-term trend continues to be profit booking on every rise and the next range to be watched out for is around 14777 to 15005 points and this can be achieved in the short term.
Technically, we feel that the Nifty needs to cross the level of 15005 points, the immediate support for the Nifty future are placed around 14808 and 14777 points whereas resistance is seen around 15005 -15033 points.
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