Nifty is at important juncture. There is flood of bad world news. Omicron is posing new scare and European nations are gearing up for strict lock-downs…again! Netherlands has done it, UK and France are seriously looking at this possibility. Add to this the announcement by Fed chairman who upped the tapering target and increased rate hikes from 2 to 3 for next year in US which sent all European central banks to start thinking about tightening in very near future. So it is exodus of liquidity from system and closing of market place in various nations which is strangulating the general economy in US and Europe. So what about India? India per se does not have any bad news in particular but then there is no great news either. Omicron cases in India are increasing bit by bit but they are reported to be less or not fatal, at least for fully vaccinated people. In such cases our markets are likely to follow world markets. (Some may argue that it didn’t happen during April- June 2021 when India was reeling under severe onslaught by Delta variant of Covid-19 during which period our markets were happily cruising upwards whereas world markets were not. True.) So now how are our markets looking?
FIIs are continuously selling. I assumed that selling would stop after US Fed announcement but it didn’t. US$ vs INR is also at an all time high with INR clocking more than Rs.76/ USD. So that is lucrative for FIIs to withdraw funds in INR and repatriate back to US in Dollars. This gives one more reason for FIIs to Sell.
Whenever there is news, charts tend to break important levels and hence they can’t be relied upon- well, that is my view and others may differ. Yet, if one wants to look at some support, charts can be used for reference. With that in mind, if Nifty looks for support near current price, then various levels are 17,000, 16,910 and then 16,675. Banknifty too is very weak and it shows 34,760 as one good support as per Fibonacci series. So my guess is that 16700 and 34700 present last lines of defence as of now. Both indices will spend 2-3 days in that respective vicinity before bouncing up. If that does not happen, then Nifty is headed for larger fall.
FIIs are continuously selling. I assumed that selling would stop after US Fed announcement but it didn’t. US$ vs INR is also at an all time high with INR clocking more than Rs.76/ USD. So that is lucrative for FIIs to withdraw funds in INR and repatriate back to US in Dollars. This gives one more reason for FIIs to Sell.
Whenever there is news, charts tend to break important levels and hence they can’t be relied upon- well, that is my view and others may differ. Yet, if one wants to look at some support, charts can be used for reference. With that in mind, if Nifty looks for support near current price, then various levels are 17,000, 16,910 and then 16,675. Banknifty too is very weak and it shows 34,760 as one good support as per Fibonacci series. So my guess is that 16700 and 34700 present last lines of defence as of now. Both indices will spend 2-3 days in that respective vicinity before bouncing up. If that does not happen, then Nifty is headed for larger fall.