Hello reader, hope you’re doing well. Markets are opening with a gap-up post a 9 day correction followed by a consolidation. Although concerns regarding the worldwide macroeconomy and political tensions persist, certain sectors have become appealing on the valuation front as a result of recent corrections. Nonetheless, investors should be cautious of fluctuations during the day.
Important points to note:
- Nifty is nearing the levels of 17700 which was the bottom formed twice, in december and january, which shall act as the first line of resistance here.
- The 20 EMA level of 17800 on the daily timeframe charts would also be a key turning point moving forward.
- The short covering rally is continuing here with all sectors being in the green overall, but one must be wary of weaker sectors where we can see some profit booking.
- Nifty FMCG looks poised to give a neat breakout, more momentum to kick in above 45700 levels.
- Nifty PSE being the strongest of all sectors, with 4540 being the major top here. Crossing that would result in a multi-year breakout post which there would be a huge outperformance in these stocks.
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.
Nice! What is a gap-up and consolidation?
A gap-up is when the opening price of the day is significantly higher or lower than the previous day’s closing price. Consolidation as the word means, is the price being confined to a small range and not moving outside the said range.
Understood! Thanks.