Dear patrons, last week we saw two big events unfolding and markets reacting to these events. Markets were volatile and moved in both directions substantially, gaining one day and losing next day to regain lost ground the next day. After a sombre expiry for the January series markets had a cheerful beginning for the February series and moved up sharply, only to lose ground equally sharply next day. Penultimate day to the Budget saw relatively less movement.
Globally the US Federal Reserve kept interest rates unchanged. Inflation being the hindrance in cutting interest rates. US markets however, remained resilient and barring a dip immediately after announcement of policy they remained buoyant and inched higher afterwards.
Locally, Budget was presented on 1st February. It being Vote on Account (or interim Budget) did not have much impact on the markets. Most of the policy decisions will only be taken in a full-fledged Budget in July. Some key points in the interim Budget being restricting Fiscal Deficit to 5.1% from current 5.8%. There is major thrust on infrastructure spending, and Defense spending has also risen with focus remaining on "Atma Nirbhar Bharat".
Let's see what happened last week and try to figure out what lies in store for the coming week in the markets
Nifty managed to sustain above 21500 level, which acted as resistance for January series expiry. As soon as it broke above 21500, move upward was swift and it made an All Time High on Friday. For the coming week resistance for Nifty is placed around 22200-22300 level and support lies around 216000-21500 level. Markets may react to banking giant SBI's results on Monday and things should normalize after initial reaction.
BankNifty on the other hand has remained subdued almost entire January series. We believe time is ripe for BankNifty to move up. Resistance for BankNifty is placed around 46200-46300. Once it manages to sustain above these levels BankNifty should lead rally in the markets. Support for BankNifty lies around 45700.
Traders can adopt "Buy-On-Dips" strategy. Investors should look to accumulate good quality stocks in every dip.
Happy Investing!!!
"Everyone has the brainpower to make money in stocks. Not everyone has the stomach” ~ Peter Lynch
P.S.: This communication is for educational purpose only and does not recommend buying or selling any stock or index. Trade at your own risk.
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