“BUY NIFTY ABOVE 7015 TGT 7045/7100 SL 6860”
Markets ended
lower on Monday amid a volatile trading session after weak global cues offset a Budget that
maintained the path to fiscal prudence and growth while higher allocations to
the rural sector sought to boost incomes of the poor and the underprivileged.
Union Budget 2016 failed to cheer the market, as BSE Sensex and NSE Nifty skid 0.50% on Monday in a
volatile trade. What evoked optimism was the government's proposal to retain
fiscal deficit target at 3.5% of GDP for 2016-17. The Sensex closes 0.66 %,
or 152 points, lower at 23002, while the Nifty 50 closes 0.61 %, or 42 points,
lower at 6987 after finance minister Arun Jaitley’s Union Budget announcements.
The Sensex fell as much as 660 points on Monday afternoon but recovered later
as market participants assessed finance minister Arun Jaitley’s Union Budget
announcements, particularly with respect to taxing of dividend income in the
hands of high net-worth individuals (HNIs). The government’s pledge to retain
fiscal deficit target at 3.5 % of GDP for 2016-17 spurred optimism that the
Reserve Bank of India (RBI) may lower interest rates.
Union
Budget 2016 has struck a fine balance between fiscal prudence and providing
growth boosters to the economy. The Budget is leaning more towards rural
consumption, which in light of consecutive bad monsoons steps will bolster the
India consumption story which is reliant on rural consumption. As expected, the
Budget has laid emphasis on infrastructure especially roads, it is also about
higher taxation for the elite class and effective utilization of the same
proceeds towards the growth and development story of India.
Markets
can lead to a big short covering rally in March. The two key important
ranges--placed so close by, one between 7037 and 7126, and the other between 7020
and 6900--would determine the probable course of price movement during the
trading session. If were to see the upper range being taken out firmly, we can
also expect even the canonized level of 7200 getting taken out as well while
the lower range, if taken out decisively, would see more weakness coming in, we
could well be bracing for a retest of 7237 - 7255 strong support area. If we
were to see the Nifty taking out 7250-level as well, on any intraday up move,
we could well see the index testing 7280 through 7300 strong supply zone. Our
take is to sell any rally for we tend to think this corrective rally has run
its course; however, if it were to take out even 7350-mark then we would have
to go for a rethink.
More about intraday tips on Google +
Resistances: 7000, 7050, 7100
Supports: 6950, 6900, 6850
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