During the last few days I have been hearing a lot of noise from various sources that after the budget the market will crash badly and nifty 50 will break the 14000 levels and correct itself until 12000 levels. However, I have a totally opposite view and a perception towards the market post budget. I think that the rally which came from the 7000 levels, its top has not been made yet and I feel that post budget nifty will again test its ATH and move further ahead. My analysis has been briefly explained below:-
1) Budget view- I am expecting a very decent budget. Nothing too extraordinary nor anything to worry about! 2) Now coming to the main analysis, tomorrow (ie. 27-01-2021, Wednesday) if the Tuesday's low is broken out then it is highly probable that Nifty may test 14000 levels within 1-2 days max. 3) 14000 being a very major support level for nifty, and if we see that after testing the 14000 levels nifty starts taking support over there and does not breakdown further, this will be the first bullish sign of the upcoming rally we may witness post budget. Also, we can clearly see on the chart that the 50% correction fibo level for the rally which came from the 13150 levels for nifty 50 comes out to be around 14000. 4) After taking support at 14000 levels till Thursday, nifty may move towards the range of 14360-14500 which is a major confusion zone (marked on chart) for both bulls as well as bears and none of them will create any big positions for the budget on Friday if nifty closes within this range on Friday. This will give us further confirmation for our bullish view. 5) And finally after the budget we can expect a good rally of about 500-700 points in nifty 50 provided all of the above mentioned things happen within this week. 6) I will be creating my positions based on the above analysis. I will create a few bullish positions when nifty starts taking support at 14000 and then later on Friday I may add on to my positions if nifty closes between the confusion zone.
P.S. This is just my view and please consult your financial advisor before taking any positions. Also, do share your views in the comments. Thanks Saurabh Sethi
Update 6- Take a note that the rally is not over yet, rather it has started! Nifty is approximately 900 points above from our levels as per today's closing.
SaurabhSethi
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Update 5- Exactly as I mentioned, market took support at the mentioned levels. Also the budget fueled the rally and nifty rallied approx 4.5% today. As I mentioned at the beginning itself that it is highly likely that the markets will rally again after the budget, now we may witness another big leg in both Nifty & Banknifty. This is the power of psychological analysis above price action!
SaurabhSethi
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Update 4- Not creating any positions as of now. It’s just a wait and watch scenario!
SaurabhSethi
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Update 3- I wasn’t expecting nifty to break 14000 and close below it! This shows it’s not that easy to predict the markets with high accuracy. However, now I will be looking for the next major immediate supports for nifty which is around 13800.
SaurabhSethi
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Update 2- See how beautifully nifty is approaching to our levels. If it starts taking support near to 13950-14000 then I will create long position either today or tomorrow.
SaurabhSethi
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Update 1- Don’t rush into taking any positions right now! Let nifty come near to 14050 levels and then we will see how it behaves there.👍