Market Update 14. 05. 2021

Hope you all keeping well. Came across some news that Maharashtra extends lockdown to 1st June. The environment continues to remain uncertain and challenging. My prayers go out to all those affected by this pandemic, may light shine and I hope India simles again. Markets continue to have inflation worries. Bonds rise. Banknifty and Nifty have had a "volatile rangeboud" week. Quite an interesting week for traders.

So what's next?

Banknifty currently holds a multiple-tested support level at 32150/32450. High probability that we may gap down tomorrow and likewise close the gap at lower levels and look for support around 31380/31510. I see no signs to go long especially on financials until we start trading above the 200ma.

Nifty50 trading in a narrow channel. Yesterday's low remains the last hope until we see lower levels. Again no reason to go long until 200ma gets taken out with sustainable newsflow and volume.

DJI & SPX index broke through a large patter opening up to a quite evident possibility of a "sell in march" scenario. Infact a lot of trend breaks this week.

It's always good to respect historical sell signals. Not every sell signal leads to a big correction or bear market, but staying cautious and considering what really matters may sometimes help.

Bonds inch for higher levels. Rising inflation has been a growing concern and maybe things might not precisely play out as per the technicals indicated but you also need to consider that these charts imply that the feds tools could fail miserably and much higher rates are coming.

A key market component that I always consider looking at is the $VIX. We have been seeing good follow through in this pattern where a breakout would be worth to watch out possibly in the next few days to come.

That's all for this update. Take care and stay safe.