Dear
Trader…
As expected 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, in our last
note, we had only mentioned about the possibility of a selloff at higher levels
in the market. While trading precisely on the expected lines, Nifty saw a
strong selloff at 15202, higher levels due to profit
booking amid growing concerns over a spike in corona virus infections and recorded 12,760 fresh Covid-19 cases.
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.
On the global front, The US Dollar index crossed 90.50 marks again and pushed gold
and silver prices lower. Both precious metals plunged on Tuesday amid a sharp
rebound in the dollar index and better than expected US Empire State’s
manufacturing index.
India Gold MCX April Futures were trading lower on Wednesday
tracking muted trend in the international spot prices. Gold and silver plunged
amid a sharp rebound in the dollar index, we expect the dollar index to
show further strength in coming sessions and push gold prices lower but silver
could get support amid gains in the base metals prices.
Nifty saw intraday volatility and poor advance decline ratio.
Risks of sharp and sudden selloffs at high levels remain. One needs to be
careful and keep long positions under control and keep taking profits on trading
and some investment positions.
The overall market breadth has turned
negative on every rise, the negative market breadth was mainly due to the
weakness in the broad market indices of NSE like midcap 100 and small cap 100
by around 0.70% and 0.21% respectively.
In coming trading session, main
indices have almost reached the high, in context with a bounce in the global
and the domestic economy. Interim corrections should be used to accumulate, as
the broader setup remains positive, the market may turn a bit volatile in the
short term, as it will be difficult to maintain the momentum given important
upcoming events so index is likely to trade
volatile,
We still maintain our stance that the trend
is volatile and pullback rally is in offing and selling may emerge. Hence
trader needs to be cautious at current level.
The trend deciding level for the day is 15232. If NIFTY future trades above this level then we may witness a further rally up to 15272-15303 levels. However, if NIFTY trades below 15130 levels then we may see some profit booking initiating in the market, which may correct up to 15088 to 15005 levels.
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