Trekking through the markets
Value hunting drives Indian equities higher
The broader markets continue to sharply outperform the benchmark indices, as the investors and traders hunt for the “value in beaten down mid and small cap stocks. F&O monthly expiry and global jitteriness however kept the traders on the edge. Market breadth was strong, implied volatility lower and level of activity very high; consequently, momentum in market increased.
Small caps, PSU Banks, FMCG and IT were the top performing segments. Realty was teh only sectoral index to end the week with some losses. INR ended a tad stronger, while bonds were lower.
The fear of “second wave” spooked the risk rally in global markets
The fears of “second wave” of COVID-19 halted the risk rally in the global markets. Equities gave up all the early gains and ended the week with decent losses. Precious metals and safe haven bonds registered decent gains. USD was a tad weaker. Crude oil corrected by almost 3%, while copper held the gains. US equities underperformed, while emerging markets managed to close to the week with some gains.
Outlook for the week
The near and short term outlook and trend for Indian equities remains unchanged from the last week. The daily and weekly trend continues to be positive while the monthly trend remains neutral. The momentum has increased further indicating decent probability of a dramatic change in outlook and trend in the near term. For this week-
· The day traders may avoid trading in 10017-10142 nifty range. The long positions may be held with a stop loss of 10244. Outstanding short positions may be held only with a strict stop loss of 10553. New shorts may be avoided till Nifty closes firmly below 10017 level.
· For Bank nifty, long positions may be initiated only if it remains above 21049 level; with strict stop loss of 20975. All short position must be held with a strict stop loss of 21795.
Other relevant readings
Indian markets last week
Global market performance last week