Market witnessed some lackluster movement where bears look more in control. Bears tighten their grip on the day of Jan f&o expiry 2021 & took nifty below 13800 & made a low of 13713 but at the end managed to close the day above 13800 at 13817 down by 150 points. At close, the Sensex was down 535 points at 46874.It is a healthy correction from record highs and looking at the derivative rollovers it seems traders are lightening their positions ahead of the Budget which is a good sign to go into a major economic event.
Current correction in the markets is not surprising and in line with our
expectations post the ~27% rally in the markets since October end. The rally
has been driven by strong FPI flows due to the risk-on environment post the
outcome of the US elections. At current levels valuations at ~21xFY21 Nifty EPS
estimates are expensive. The fall in the markets is also getting exaggerated
due to negative global cues, F&O expiry and profit booking prior to the
Union Budget on the 1st of February. Market has closed slightly above the
levels of 13800; it is expected to touch the levels of 13,700 in the coming days.
13600 -13500 will be an important support zone, while 14000 will be an
important resistance.
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Resistance: 14000, 14200
Support: 13700, 13500
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