Trekking through the markets
Poor macro data, continued rise in COVID-19 cases, rising tension on Ladakh LAC, and poor global cues triggered profit booking in India equities. The level of activity remained very high. Volatility was substantially higher. The market breadth was poor as all sectoral indices ended the week with losses. Financials were the worst performers with PSU banks leading the rout. Defensive IT and consumers were relative outperformers.
RBI intervention led the yields lower. INR was marginally weak.
Global markets become more volatile as POTUS election pitch rises
The sharp correction in US tech stocks led a global correction in risk assets. The positive development on COVID-19 vaccine development though stemmed the decline. Equities corrected sharply and volatility jumped higher. Crude and precious metals also declined. Copper was higher on positive Chinese data. USD strengthened and bonds were marginally higher.
Outlook for the week
The outlook and trend for Indian equities has changed from the previous week. The outlook and trend now is neutral for near (daily), short (weekly) and midterm (monthly), implying balanced risk reward for traders. The momentum remains high, indicating strong probability of a sudden change in the market outlook and trend. For this week-
· The day traders may avoid trading in 11327-11513 nifty range. The long positions may be held with a stop loss of 11142. Outstanding short positions may be held only with a strict stop loss of 11642.
· Bank Nifty is now in neutral zone. Fresh long must be avoided. All short position may be held with a stop loss of 23645. Day Trading may be avoided in 22450-23325 range. For all long position maintain a strict stop loss of 22040. A close below 21970 anytime in next two weeks could trigger a midterm (9-15 months) down move in Bank Nifty.
Market trend and outlook
Indian markets last week
Global market performance last week