Are the Indian Markets Back on Track ?

Indian markets have been in an extremely wild volatile range. The markets have been fluctuating by 800 points on a weekly basis. If we analyse the recent scenario then it took the Indian markets to climb up to 18800 points from 18000 points. This took a 4 months time period for the index. However the Nifty50 fell to 18000 and below within a time range of 4 days. This is the situation of the Indian stock market. The reason behind the same was the India markets suffering from a deep fear of another COVID crisis.

Since the Chinese provinces have been put under lockdown the fear around the world for another COVID crisis has emerged. This has made the markets go down due to lack of trust amidst the investors. However on the other hand other classes of investors are also finding this as an opportunity to buy at dips and bring down their average price of investments. 

When the markets fell for more than 800 points in consecutive sessions, there was one session wherein it pulled back almost 2% gains. The gain was more than 200 points in one single session for the NIFTY50. This gave a direct impact on the customer’s mindset and initiated a buying decision from the retail investors. However again due to multiple reasons such as worsening currency scenario and the FED Meet coming near the market participants have turned on their alert mode and are becoming cautious about their investments. This has led to markets being trapped in a range of 17800 to 18100 for more than 1 week now.

Indian Market Scenario

Currently the Nifty50 is trailing at 17985 points and Bank Nifty is trailing around 42200 points. This is the situation amidst 2 major events. The Fed meet and the budget declaration next month. As soon as the budget date is coming near, the entire stock market will witness the pre-budget and post-budget rally which is always out of the control of any individual. Hence the markets are going to be volatile for the better part of the month. Alongside this the Fed meet this week will determine the flow of pre budget rally for a short term. This short term rally will in turn decode the momentum of the markets during and post the budget announcements.

With the current scenario the SGX Nifty always tends to go upward after the Indian markets close in. Apart from this the markets are always under the grip of FIIs who have been shuffling their money between gold and stocks given the currency situation currently. With retail investors having less part in the markets we can now definitely say that the markets will be moving to the tune of the Fed. If the Fed delivers some positive news we can definitely expect a strong rally in the indices before the budget announcements. If the Fed announcement harms the overall economy and market sentiment one has to get ready for a considerable downside in the Indian indices.

Indian Markets and their Further Road

The current market scenario makes sure that the Indian indices will be moving based on the news delivered by Fed and Finance Minister of India. So one has to be sure to keep the risks low and be prepared to average out the long term investments. With this caution the further road seems a bit stuck for the indices in the range trailing currently. Also one can expect an upside of 200 points or even more suddenly within this week if the Fed announcements benefit the investors and the companies. Hence market participants should wait this week for the Fed announcements and then take investing decisions based on the news input.

One thing is sure if the Fed delivers positive news then the markets will definitely move upwards by a huge margin and this will continue till the budget announcements and vice versa.

Are the Indian Markets Back on Track ?

If we want to determine whether the markets are back on track then the answer to this situation will definitely be no. The markets have lost their way and are now expecting to get news to get their boost and momentum back. The situation would not at all improve until the market participants get some positive news as the COVID crisis and the Currency devalution have been keeping the investors out of the market risk.

The support at the 17800 and 17600 levels is the maximum whereas the markets have a strong resistance around the 18400 levels currently. Further on 18800 is the maximum resistance zone based on the volume in the option chain. For now the markets are trailing in the 17800 to 18100 range and any move above these levels coils assure a short term rally in the index for almost 70 to 100 points. Hence traders need to be cautious about these levels of Nifty50.