Jitters post US inflation data release of last Thursday still continues. Jitter is mostly in anticipation of an aggressive tapering off by Federal Reserve. Gold price breaking out on up side shows that investors have finally started looking for a safer arena.
Ukraine Russia unrest is on the horizon for quite sometime. Market does not like such uncertainties.
Oil prices over the roof. WTI crude touching levels of 2014 once more. Not a good news for India market.
India news/concerns:
RBI is not concerned about rising inflation as yet but then crude price skyrocketing will not let it ignore inflation for long
FII is constantly selling in this market, mostly, triggered by profit booking. But, a higher valuation of India market and tapering off back home is also a consideration.
News about ABG Shipyard bank fraud case have surfaced now. This case is not a new discovery and relevant banks have already made this account an NPA in their respective books but then a renewed news of an existing financial fraud can always give some knee jerk reactions.
Technical:
On 11-Feb, India market was fairly volatile because of jitters in US market, the night before. Huge gap down, recovery mid day and then sell off late in the afternoon. The recovery in between was more to reverse the F&O positions of smart money from moderately bullish to extreme bearish.
The F&O data post market hours of 11-Feb tells us that except retailers all other market participants have taken extreme bearish position.
US market has closed previous week at or near the bottom. So, new week is expected to start in a bearish note.
SGX Nifty has closed the week another 70 points down from where Nifty closed the market on Friday. Though, it may change significantly by the time market opens on 14th Feb.
Expectation:
Unless further bad news do not surface over weekends (as if we do not have enough), expecting a moderate gap down (around 100 points) followed by a sustained, slow recovery throughout the day. Oh yes, 100 points in Nifty is a moderate move in a volatile market.
Do not expect that market sentiment will turn around to be bullish anytime soon. Rather, all up move will be sold off.
Level wise, budget day low (17250) is a strong support followed by 17050, 16850. On the upside, 17300 itself should work as a strong resistance which was such a good support on Friday. Next resistance on upside is 17430 (great if it reaches there).
We have tested the 16850-17050 support area too often in a rather short period time. So, it has become weaker and next time, we knock the door and it just opens…It will happen sooner than later but not on 14th. There is void below that except a small support around 16400.
