Dear Trader…
On the second day of the week, the
benchmark started with an uptick, tracking supportive global cues and inched
further higher initially but profit-taking in the index majors trimmed all the
gains as the session progressed.
The Nifty futures opened at 15008.00
points against the previous close of 14968.75, opening at a low of 14915.20
points. Nifty Future closed with an average movement of 167.00 points and a
strong rise of around 5.75 points and around 14974.50 points..!!!
The NSE saw
rise in auto, FMCG and IT stocks, the
domestic sentiment is suppressed by rising COVID-19 cases increasing the risk
of a second wave and fall in macro data like production & rise in
inflation, among sectors, Nifty Bank, PSU Bank and Metal indices shed down 0.8
percent, while FMCG and IT index added up 0.9 percent each. The broader indices
outperformed the benchmarks with BSE Midcap and Small cap indices ending in the
green.
The overall market breadth
has turned negative on every rise, market may see volatility with risk of sharp
and sudden selloffs at high levels remain and we can expect FII selling to come down post the Fed policy meet
outcome and US bond yields to ease as an accommodative outlook is expected.
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.
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.
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.
Going ahead, we expect index to endure its northbound
journey amid rising volatility eventually head towards our earmarked target of 15202
by the end of March, thus, 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 15088 points, and the trend continues to be profit booking on every rise and the next range to be watched out for is around 14888 to 15202 points and this can be achieved in the short term. The immediate support for the Nifty future are placed around 14909 and 14888 points.
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