“With the Union Budget on the horizon, it’s time to question our bearish narrative, which has guided our market analysis since late September.”
“Indian markets are about to head towards a very important event: the Union Budget. So, it’s an ideal time to review our approach, or rather, I should say it’s time to relook at our bearish approach, which we have been carrying since late September.”
“Our bearish outlook remains intact as the NIFTY spot has yet to reach our projected downside target of 21700. We will continue to capitalize on rallies by shorting, aiming to solidify our bearish position.
To optimize our strategy, we have two options:
1 Reduce trading activity: Minimize market participation while maintaining our short bias.
2 Await a rally to 23500: Utilize a potential rally as an opportunity to establish new short positions.
Our overarching objective is to maintain a short-selling bias until our projected downside target is achieved.”
The NIFTY index currently faces resistance at 23,500. Support for the index lies within a critical band ranging from 22,800 to 22,600. A decisive break below this support band could trigger a sharp decline, potentially leading to a significant market correction on immidiate basis.
As previously noted, with the India VIX exceeding 17, a sustained unidirectional move in either direction appears unlikely. Historically, elevated volatility levels often precede a decline in asset values.
On TIME front Even without considering the Union Budget, the 3rd and 4th of February are significant cyclical dates for the NIFTY index. These dates are likely to witness heightened volatility in the market.
Regarding the time projection for a potential test of the 21700 level, I anticipate this occurring by March 8th. However, there’s a notable possibility that this level could be reached as early as February 19th. This date holds significance as it marks the 144th day since the NIFTY’s September 27th high.
The Union Budget is certainly a significant event for the Indian markets, but it’s not the only factor driving market dynamics today. The concurrent Federal Open Market Committee (FOMC) meeting and the impending January series monthly expiry tomorrow are likely to significantly elevate excitement levels among market participants.”
“In conclusion, the NIFTY index is poised for a period of heightened volatility. By closely monitoring key resistance and support levels, and remaining cognizant of both domestic and global events, investors can navigate this dynamic market environment more effectively.”
gann,insides 