InvestorQ : What will be the outlook and trend for the Nifty in the near term?
Pratik vyas made post

What will be the outlook and trend for the Nifty in the near term?

Answer
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3 months ago


The small-cap stocks rallied hard to keep the uptrend in Indian equities alive for the fourth week running. The global rally in metals reflected in metal stocks which were the best performers for the week. Private banks and the IT sector also outperformed as concerns over loan moratorium and US business eased. PSUs (ex-defense and metals) continued to be the worst-performing sector. The momentum eased considerably as volumes were lower and implied volatility eased further. The market breadth was better. INR weakened while bonds gained.

Some encouraging macro data coming from China led the sharp rally in Copper and other industrial metals. It also supported a recovery in global equities. The rally though was not without doubts, as the safe-haven bonds also gained. USD ended the week lower.

The near term (daily) outlook for Indian equities has deteriorated to neutral from positive. The short term (weekly) trend and outlook however remain positive. The monthly trend remains neutral. The momentum has eased a bit further 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 the 10620-10745 nifty range. The long positions may be held with a stop loss of 10445. Outstanding short positions may be held only with a strict stop loss of 10880. New shorts may be avoided till Nifty closes firmly below the 10331 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 21888 levels; with a strict stop loss of 21754. All short positions must be held with a strict stop loss of 22610. The compulsive shorters may prefer Bank Nifty over Nifty.