What have we learned so far in 2021? Simple: The relentless liquidity machine remains in full control. In addition to renewed and larger fiscal stimulus central bankers, including the Fed, have made it abundantly clear they will keep printing no matter what the data shows, no matter how much inflation there is (“let it run hot”).
April is a 5 week series. Also corporate results will start pouring in from second week of April. There are 4 public holidays in April. So effectively there are 21 trading sessions. Banknifty has been on quite a volatile declining range. As seen in above chart the index has experienced a good last hour buying taking support on the 150MA and 200MA.
A possible breakout would be worth trading next week.
Markets are likely to go all over the places again. Usually when a down trend starts, it lasts between 8 weeks and 12 weeks. Bond yield stable around 1.674 but really wonder for how long. The problem for the market remains lack of FII buying. Conviction in long trades missing due to muted FII data. As covid wave surges, pharma will emerge as a theme again
Pharma Index 11% off highs, trades near 200MA.
S&P 500 closes around all time high. Literally 20pt five minute candles. The tags of the trend appear to become more frequently highlighting again the relevance o the trend line. And note the trend line while currently intact, is steep, very steep indeed and can hardly afford a technical break given the chart extensions we see across the stock universe.
The message: Rips to new highs remain selling opportunities for 50MA/100MA reconnects, while these very same reconnects continue to offer buying opportunities unless the trend breaks. In that case of course all bets are off and the market could find itself re-balancing in a major way including filling a lot of gaps.
In last weeks action the consumer and auto sector also showed some correction. Had uploaded an update on my Linkedn page.
Alongside I managed to grab some opportunities at HEROMOTOCO & MARUTI where I landed up creating a bearish call spread and they seem to have played out in a refined way.
Lots of two-way action and very tricky to navigate through from a trading perspective so what I wanted to do is kind of keep you abreast of some of the key things I've been pointing out in public in our market blog section on the website just kind of follow through up on those high level items if you want more details obviously we have market services and market videos where I go through the technical's in detail either weekly or on a daily basis by putting content more into a vibrant perspective.
I hope this was helpful, again if you haven't seen the articles you can go through them. Also wishing you and your family a bright, colorful and a joyful Happy Holi.
See you all next week. Take care!