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Nifty ended slightly lower after recovering
sharply from the morning lows of December 20th. Nifty rallied after midday,
after the negative impact of the Bank of Japan's unexpected hawkish move to
widen the long-term yield range had faded. At the close the Sensex was down 103
points at 61702 and the Nifty was down 35 points at 18385. Markets struggled
through the session, ending in red on weak global clues but recovering most of
their early losses. The choppy trend can be attributed to the lack of new
positive triggers. Investors are also awaiting the release of the RBI's
recently concluded monetary policy minutes on Wednesday, which may provide some
clarity on the likely course of action for central banks in the near future.
The Bank of Japan shocked global markets with a totally unexpected move raising
the upper band limit for the 10-year yield to 50 basis points in what is seen
as a move toward a hawkish policy shift. This has exacerbated the sell-off in
the global market, which was already risk-averse due to mounting recession
fears following the Fed's comment. Against this background, the US GDP figures
expected for Thursday will give a picture of the strength of the US economy.
Technically, after a sharp sell-off during the day, the index took support near
18250 early in the morning and recovered from the daily low. Currently, the
market is witnessing omni directional activity and perhaps traders are waiting
for a breakout on either side. For bulls, 18500 would be the key breakout
level to watch. And if the market manages to trade above it then we can expect
a quick uptrend rally towards 18600-18700. On the downside, trading below
18250 can amplify further weakness towards 18200-18100. Low market volumes
have led to higher intraday volatility in the markets. Nifty could now remain
in the 18225-18475 range for the short-term and a break of this range could
result in an accelerated move in that direction.
Resistance: 18300, 18400, 18500
Support: 18200, 18100, 18000
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