- However dangerously poised, Russia and Ukraine war will not go a long distance now. Around that there will be lot of noise and news to make the market volatile but critical phase of this episode is over. But, instability caused by this episode will linger on the market for at least next 3 months.
- Crude and gold will settle down at higher level with little correction / consolidation thereby making Indian economy uncomfortable.
- Dow and S&P is in correction mode (not only thanks to Putin) and inflation story which has taken a backseat now will come back up. That is next best issue and it only has unpleasant solutions for market.
- Constant selling by FII in cash is still visible. But then why they are accumulating stock futures? To take advantage of DII/Retail buying? Please note that March is the month DII is bound to buy for closing the year with a good NAV and that might FII to put the final accelerated selling.
- Inflation is already a big concern for India but then RBI also prefers to play a copy cat to FED and unless FED blinks, RBI will not. But, it is a matter of time before unpleasant decisions are taken and smart money is already taking position for it.
- Retail investor who feels like duped in March’20 when he could not board the bus on time, is now suffering from FOMO in every fall. Retail is definitely buying every fall thereby giving FII a good value for their sell.
- LIC IPO coming sometime in March may be one of the culprits to take liquidity away from the market. Check history of the 5 largest IPO till now and you will come to see what happens to market immediately after that. This is nothing to do with fundamentally how LIC fare from long term holding perspective. This is a cash cow of GoI which has been traditionally used to fund the failing siblings, if you understand what that means.
- Lower high lower low in daily chart of Nifty is already telling us that we are in a downtrend which has come after a run of 1.8 years of bull run.
- In the weekly chart, we are making lower high, lower low for last 4 weeks.
- In the monthly/weekly chart, high of Oct’21 and Jan’22 can be considered as double top.
- The sentiment of India market is expected to remain bearish to neutral, sudden bullish moves will be cut off by slow selling for a longer duration. This will be severe after 15th March when DII is expected to come big with their year end shopping but this will be used by FII to do the final selling.
- Oil price, interest rate increase will play spoilsport during this period. Market would have accounted for all these had this war did not come into picture in the meanwhile.
- In the downside, support can be seen around 15400-15600. This level is expected to hold first time around since the bearishness in the market will be prolonged rather than sharp. Volatility will sharply reduce assuming no other external geopolitical issues surface.
Purple support lines are the ones where Nifty may reach anywhere between 15-Mar to 15-Apr. But the pain might not end there. I do not see the exact bottom at this moment but red line can as well be the final destination in this bear run.
This is an out and out bearish outlook and remains in play unless Nifty gives a daily close above 17300. All these may appear unbelievable right now but such a downfall will always be supported by a bigger downmove in US market. When our domestic market has more retail participation and FII is in a mood to take money out of our already inflated emerging market, all bearish levels are achievable.
As an alternative approach, if Nifty crosses 17300 and sustains, then we can expect a technical move upto 17850-17900 to touch the upper side of the channel and a fall from there will start for the lower end. Time wise, this new lower top will be made somewhere around 21-March and we will start downward move from there.
Let’s see where this month (and next two months) take us. But this will be a passing phase for a bigger and stronger (and not necessarily faster) upmove in 2023-24.