Dear Trader…
Indian equity benchmarks continued to show a sluggish trend with Sensex and nifty trading closed their psychological levels of 47,410 and 13,967, respectively on domestic cues viz. decline in index major, news of fresh feud between India-China at Sikkim border dented the sentiment.
The sentiments were under pressure with Reserve Bank’s data showing that overseas investment by domestic firms fell by over 42 per cent to $1.45 billion in December 2020. In the year-ago period, companies in India had invested $2.51 billion in their foreign firms (joint ventures / wholly-owned units). Traders failed to get any solace with International Monetary Fund’s (IMF) projecting that India will reclaim the status of world’s fastest-growing economy and projected its growth at 11.5 per cent in 2021 and India is rebounding to achieve the target of a $5 trillion economy. In scrip specific developments, Reliance Industries tumbled amid concerns over the Future Group deal.
Market continues to remain in an uptrend in the medium and long term, so buying on dips continues to be our preferred strategy. The daily strength indicator RSI is moving downwards and is quoting below its reference line indicating negative bias.
We believe the current leg of profit booking followed by higher base formation, after a sharp run up would make market healthier ahead of key major event of Union Budget. Therefore, investors should not construct the current profit booking as negative; rather utilize the same as an incremental buying opportunity to accumulate quality banking stocks.
It’s a holiday-shortened week and we expect volatility to remain high ahead also due to the scheduled expiry of January month derivatives contracts. Besides, we’re seeing participants speculating on the probable announcements in the Union Budget, which is further adding to the volatility.
The trend deciding level for the 28th January is 14044. If NIFTY trades above this level then we may witness a further rally up to 14144-14202 levels. However, if NIFTY trades below 13888 levels then we may see some profit booking initiating in the market,
The Nifty future index has immediate support at 13808 levels, sustaining above which will lead to a pullback in the coming week. Failure to do so will signal extended correction.Note :- Before Act please refer & agree Terms & conditions, Disclaimer, privacy policy & agreement on www.nikhilbhatt.in
