InvestorQ : Does the Rural recovery theme leads the market higher & will continue?
Mitali Bhutta made post

Does the Rural recovery theme leads the market higher & will continue?

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3 months ago

Strong tractor sales, more food subsidies for the poor, and hopes of a stronger and faster recovery in rural markets led the auto and consumption stocks to rally hard. The market breadth was positive but not as strong as it has been in recent weeks. Volatility eased further. The level of activity was much lower than the past 3 weeks, indicating that momentum may be slowing down. Auto and consumers were the best performing sectors, while realty, pharma, and PSU banks were notable underperformers. INR gained further while bond yields eased.

The global markets witnessed a sharp rally in risk assets, as encouraging macro data from the US, China, and Europe shadowed the virus concerns. Positive news on vaccine development also helped. Equities rose, volatility subsided, bonds sold off and USD was weaker. Crude oil jumped higher on OPEC deciding to cut production sharply. Gold was flat.

The near and short term outlook and trend for Indian equities remain unchanged from the last week. The daily and weekly trends continue to be positive while the monthly trend remains neutral. The momentum has eased a bit indicating fall in probability for a dramatic change in outlook and trend in the near term. For this week-

-The day traders may avoid trading in 10355-10445 nifty range. The long positions may be held with a stop loss of 10375. Outstanding short positions may be held only with a strict stop loss of 10828. New shorts may be avoided till Nifty closes firmly below the 10142 levels. Expect a sharp up move if on any day Nifty opens with a gap above 10829 and sustains above this level for 2 hours

-For Bank nifty, long positions may be initiated only if it remains above 21514 levels; with a strict stop loss of 21492. All short positions must be held with a strict stop loss of 21923.