Dear
Trader…
Equity benchmarks witnessed profit booking as the indices
corrected sharply from every high and traded on
a negative note tracking weakness in other markets and worries over new
pandemic restrictions in the world.
The Indian stock market is currently trading at a high valuation.
In addition to an increase in the Corona case or a global lockdown will also
have an impact on the domestic market have seen “Black Friday”
further, the direction of the economy is still dependent on the status of the Corona
virus.
Concerns have been raised that the transition to a new form
of corona in India is on an alarming rise, again creating a state of lockdown
in many states. Fear of a lockdown in the Indian stock market over the past few
days and a re-lockdown in an industrial state like Maharashtra could affect
economic growth and put a new burden on the government to take further relief
measures and put natural pressure on economic recovery.
With the government’s commendable efforts to get the Indian
economy back on track, foreign funds – foreign portfolio investors – who have
seen huge growth opportunities in India, continue to be buyers in stock
specific. It will also be interesting to see what approach FPI takes in the
coming days as profit booking is being considered.
Markets are largely mirroring global cues
but the benchmark looks slightly overvalued so the possibility of consolidation
in the near term cannot be ruled out and it would be healthy for markets.
On the daily chart, we are observing that buy on declines would be the prudent strategy as
possibility of profit booking at higher levels cannot be ruled out which would
offer incremental buying opportunity to ride next leg of up move. Meanwhile,
Technically, we feel that the Nifty needs to cross the level of 14606 points, and the trend continues to be profit booking on every rise and the next range to be watched out for is around 14474 14636 points and this can be achieved in the short term. The immediate support for the Nifty future are placed around 14505 and 14474 points.
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