Hello reader, hope you’re doing well. The February US inflation figure of 6% year-on-year suggests a reduction in inflation, but it’s not at a pace that satisfies the Fed. As a result, there may be a 25 bp rate hike in the March 22 Fed meeting, which will prevent the equity markets from rallying. The US banking crisis will not be a concern for the time being since the negative sentiment in the market has been overplayed. Foreign institutional investors (FIIs) view the current market pessimism as an opportunity for sustained selling, which they have been doing for the past four sessions. As the Indian economy and banking system are robust, long-term investors may want to use this market weakness to acquire high-quality stocks, especially large-caps. The capital goods sector is also thriving.
Important points to note:
- Nifty sticking to it’s sell on rise structure, initial resistance to be seen at 17200 -300 levels.
- On intraday, it is key for Nifty to cross yesterday’s high of 17225 which is also the 200-EMA level on the intraday chart (5 mins timeframe).
- Similarly, more upside to be seen on Banknifty too, only after it crosses the 200-EMA level on intraday basis, and sustains above 39900 comfortably.
- Nifty PSE has given a retest of breakout at 4520-40 levels, which is structurally good for it to give a further upside move above 4620-40 levels.
- Huge amount of Calls being written at 17200 and 17300 levels, which are currently acting as a resistance on the index. Sustaining above these levels with a good amount of unwinding will bring in a short covering rally which can push Nifty upto 17500 levels.
As always, risk management is key, and a proper system in place prevents one from losing out too much, in case of outlier events. Have a good trading day, and may the force be with you!
Disclaimer: this post is for educational purposes only, we are not SEBI registered analysts. Trades mentioned here are not trade recommendations. Equity Investments are subject to 100% market risk, please consult your financial advisor before investing.