InvestorQ : What is the outlook and trend for Indian equities in the week starting from 10th Aug2020?
Isha Tharwani made post

What is the outlook and trend for Indian equities in the week starting from 10th Aug2020?

Answer
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1 month ago


The global risk trade reflected in India through a sharp rally in small-cap stocks, especially cyclical. Metal, Auto, and Commodities were notable outperformers. Nifty Small CAp surged 5% WoW, as compared to 1.5% up move in Nifty. The market activity was good, market breadth strong, volumes high and volatility lower. INR and bonds weakened marginally.

The risk trade that had weakened in a preceding couple of weeks revived last week. Equities rallied hard in most parts, while safe-haven bonds corrected. USD remained weak. Precious metals and crude also rallied in the weaker USD. Volatility eased further.

The outlook and trend for Indian equities have improved marginally from the previous week. The near term (daily charts) outlook has also now turned positive; while short term (weekly) trend and outlook continue to remain positive. The monthly trend remains neutral. The near term momentum is low indicating less probability for a dramatic change in outlook and trend in the near term. For this week-

 The day traders may avoid trading in the 11007-11198 nifty range. The long positions may be held with a stop loss of 10938. Outstanding short positions may be held only with a strict stop loss of 11365. New shorts may be avoided till Nifty closes firmly below the 10795 levels. A close above 11365 will open a small probability of a new NIFTY all-time high in the subsequent 23 weeks. The current up move will reverse only if Nifty closes below the 10795 levels. All prices spot.

 For Bank nifty, the up move stalled a week ago, however, the down move has not got triggered. It is therefore in a no trading zone. All short positions must be held with a strict stop loss of 22097. Day Trading may be avoided in the 21533-21970 range. A close below 20730 anytime in the next couple of weeks could trigger a midterm (9-15 months) down move in Bank Nifty. For all long positions maintain a strict stop loss of 21110.