NIFTY OUTLOOK : CMP 26215.55
Dear Friends,
As discussed yesterday, market behaviour remained on expected lines. Nifty opened near our breakout level of 26260 (opened at 26261.25) and continued its uptrend, rallying up to 26310.45 (near our level of 26313). Due to volatility it reversed from there and slipped near our support of 26151 (made a low of 26141.9). After respecting both sides of our levels, it closed almost unchanged at 26215.55.
A bearish spinning-top candle appeared on the daily chart, indicating volatility and complete indecision on direction. However, the trend remains positive. If bulls continue the lead, then on a decisive breakout of 26267, we may see a rally up to 26320–26373. If demand strengthens further, it may test 26425.
This candle appearing near the all-time-high resistance also signals a pause in trend and mild profit booking. If profit booking persists, then on a decisive breakdown of 26163, we may see slippages to 26111–26057. If supply accentuates further, it may test 26005.
Macros
- Dollar Index at 99.52
- S&P 500 VIX at 17.21
- Brent Crude at 62.92
- U.S. 10-year bond yield at 3.999%
Note
US weekly jobless claims hit a seven-month low, indicating layoffs remain low, though job creation remains sluggish. The absence of labour market deterioration argues against another Fed rate cut next month, especially with inflation still elevated.
India’s equity benchmarks closed almost flat on Thursday as investors booked profits after recent record highs, driven by favourable macros and rising expectations of a local rate cut next week.
This is supported by:
• Rate-cut hopes from both the Federal Reserve and the RBI
• Improving domestic earnings
• Tax cut expectations
• Stable valuations
• Strong domestic flows
• Benign inflation
• Robust economic growth outlook
Conclusion
Indian equities look strong for the next 2–3 months, though some consolidation and profit booking may occur in the coming days. It is now a matter of time before Mid-caps and Small-caps begin to perform.
A softer Dollar Index will support metals and bullion.
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