InvestorQ : What is the outlook of the market as another lockdown looms?
riya Ranade made post

What is the outlook of the market as another lockdown looms?

7 months ago
In line with global peers, the Indian markets also confronted the specter of another lockdown in the wake of a new variant of the Covid-19 virus. Though the calm was restored soon and the market recouped almost all the early losses; the sector rotation was conspicuous. The market breadth narrowed materially. Defensive IT and Pharma outperformed sharply. Financials, Mid, and Small-cap stocks ended with sharp losses. RBI intervened to keep yields lower and curb any volatility in INR. The institutional activity was very poor ahead of the holiday season.

A variety of stimulus and depressants kept the global markets in the balance last week. Markets mostly ended the week with marginal changes. The emergence of new variants of Covid-19 in several European countries and subsequent fresh travel restrictions led to panic sell-off, but US stimulus and Brexit deal optimism soon set off the pessimism, and markets recovered most of the losses. Crude oil however ended lower on fresh mobility restrictions. USD and treasuries were mildly stronger.

The outlook and trend for Indian markets remain unchanged from the previous week. However, the momentum has diminished further, indicating an even lower probability of a sudden change in the trend this week. The short-term (weekly) and mid-term (Monthly) trend and outlook for Nifty are 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 the 13465 - 13715 nifty range. The long positions may be held with a stop loss of 13315. All prices spot.

· For Bank Nifty The near and short-term trends are presently neutral. All short positions may be held with a stop loss of 31110. Day Trading may be avoided in the 30345 - 30695 range. For all long positions maintain a strict stop loss of 29980. All prices spot.