Traders should be cautious: Epic Research
Indian markets have been facing selling pressure at higher levels. The first quarter results will be deciding factor for many stocks in the coming weeks. Mr. Mustafa Nadeem CEO Epic Research has cautioned traders as markets could turn negative.
Nifty closes below its 20 Days SMA after almost 5 months as negative global cues, scaling Global trade war tensions with India- the US Standoff and post-budget profit booking den the Indian equity market for a second consecutive week. This is first close below 20 Day SMA which was being held for almost more than the last 5 months. Nifty was consolidating around 20 days SMA from Q3 to Q4 of FY18.
International cues have been putting a dent to the Indian equity market despite global Index such as SPX hitting historical high and touching the 3K mark, the Indian equity market is in a corrective mode.
Though on Daily scale, we have seen 100 Days SMA providing some support around 11500 levels the breadth has been very muted with key sectors such as Auto and Metal trading below 200 days SMA on a weekly scale. While only Pvt Banks, Energy continues to move up with only select stocks in an overall uptrend. RSI has been diverging from the last few weeks while the correction was very much expected. Profit booking further intensified the downswing.
Fundamentally there are important data that will be eyes such as WPI Inflation along with Food and Fuel inflation. While the cues will be taken from global markets specifically where do we go from here as the Trade tensions rise with India putting tariffs on US products? This can now be a process of months that would take to be sorted out and markets may not be taking any ease as of now.
The range for the market is seen around 11450 - 11750 for this week. A breakdown below 11450 on the closing basis can call for a deeper correction to 11200 - 11180 while sustaining the 100 days mark on the daily scale would be a positive sign. Hence traders should be cautious at this point in time.