Nifty View: Sensex falters close to 50k as traders chose to take some money off the table

market update

Trekking through the markets

Sensex falters close to 50k as traders chose to take some money off the table

Very strong numbers from IT majors, encouraging auto sales numbers and RBI assurance over continued liquidity support, lifter the markets to their all-time highs during the week, before some profit booking kicjed in towards the end of the week. PSBs and Auto sectors were major outperformers, while metals and pharma were notable underperformers. Market breadth was very poor. Domestic institutions continued to press sale. Volatility jumped higher. Volumes were very high. Bond yields ended higher while INR was little stronger.

Rising number of infection cases checks risk appetite

Rising number of cases of Covid-19 infection and detection of further mutations checked the risk rally in global assets. Stocks retreated from their new highs. Volatility increased. Cryptoes, oil and precious metals were also very volatile ending the week with decent losses. USD and Bonds gained. Emerging equities outperformed their developed market peers.

Outlook for the week

The outlook and trend for Indian markets remains unchanged from the last week. It is presently in a territory where short positions may be considered as risk reward has worsened materially. The momentum has however increased again; indicating materially higher probability of a sudden change in the trend in this week. The short term (weekly) and midterm (Monthly) trend and outlook for Nifty is firmly negative indicating an adverse risk reward ratio. The near term (daily) outlook and trend for Nifty is neutral. For this week-

·         The day traders may avoid trading in 14130 – 14370 nifty range. The long positions may be held with a stop loss of 14190.

·         For Bank Nifty short and midterm trends are now negative, while near term trend is neutral. Day Trading may be avoided in 31870 – 32130 range. For all long position maintain a strict stop loss of 30470.

Market summary

Sensex shuts shop above 49,000

Indian markets next week: Global central banks policy decisions to be watched

Succinct Summation of Week’s Events

US Weekly Market Update (18 Jan – 24 Jan)

US Market outlook (18-24 Jan)

ECB Minutes Raise Concerns Over Euro

The Energy Sector Moves From Worst To First

Market trend and outlook

Indian markets last week

Market pulse

Global market performance last week

Author: Midas Finserve

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