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 Axis Bank, ICICI bank witnessed sharp profit
booking.
Markets were trading highly volatile during
the day, as traders got anxious with Fitch’s statement that India’s medium-term
growth outlook will assume a more critical role in sovereign assessment due to
higher deficits and a slower consolidation path, also India recorded 12,760
fresh Covid-19 cases of the corona virus disease.
Traders also took note of SBI Research
revised its contraction forecast for the current fiscal year to 7 per cent. The
agency had earlier forecast a 7.4 per cent contraction in 2020-21 GDP numbers.
However, benchmark indices soon turned
positive and traded in a narrow range on the back of heightened volatility.
We observed profit booking in individual stocks, the profit
booking trend was seen in so many sectors, which weighed down heavily on the
market and thus market had a decent decline during the trading. But similar to
recent bullish trend once again played out well in the market, which helped the
market erase its losses completely.
Technically, Markets traded volatile in a range and
settled almost negative, in continuation to the prevailing consolidation phase.
Traders should continue to trade momentum
until its previous days swing low is not breached consecutively. Buy on
declines remains a prudent strategy as index scales above its life high. Major
Key level for the index now rests around 15474 while on the flipside 14909 has
developed as an elevated support zone & a prudent stop for trading
momentum.
Markets have resumed the trend after a
week-long consolidation phase and we are now eyeing the 15474 in Nifty future,
with no major events, traders should keep a close watch on global markets for
cues. Also, maintain focus on the selection of stocks and avoid a contrarian approach. We would remain cautiously optimistic on
markets.
We expect some correction after each rally. We advise investors to use correction in the market as an opportunity to buy, on the other hand, traders should maintain extra caution due to the expected rise in volatility ahead.
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