Hello,
With post analysis of the FOMC statement turning out more questions about the US Economy than it answered, US futures tumbled after close and the same got reflected in the Indian Markets which after opening positive gradually drifted to negative and finally fell sharply in the final hour before close.
While on the short term, yesterdays breakdown below the 5435 level is crucial, on the Medium term, as we said in the Weekly outlook, the main level to watch out for would be 5350. This is the lower end of the range in which market has been trading for a pretty long time and a breakdown below that should propel the market to fall another 100 - 150 points from there.
Any move below 5350 could be used to initiate short position on Nifty with a initial target of 5225. India VIX finally seems to have bottomed out and started what could possibly be a uptrend from here. Being a contrarian indicator, this spells negativity for the Index. PCR Ratio based on OI for yesterday came in at 1.40 and PCR ratio based on Volume at 1.12
Regards
Prashanth
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