Markets have a break after a sharp fall. Nifty recovers after value-buying.
Volatility cool off yesterday, but risk remain continue as market did not crosses the important resistance level of 10700. We are in the bull market and these pull back rally, short covering, relief rally are part of the bull markets. So, we have to cautious on these levels and avoid fresh buying on the current levels. First, market highly volatile and taking the cues from the global cues, where Equity Risk Premium is close to full/fair value. It refers to the excess return that investing in the stock market provides over a risk-free rate. Currently, they are giving extra ordinary, so price correction starts and it will correlate with other asset classes. As we are globally interconnected so it effects.
Yesterday all indices are in green except Oil and Gas Index where of 3 Oil and marketing companies result today and Main gainer was pharma index after 2 weeks of correction. Sun pharma gives the momentum on high rise in pharma sector.
Major support of the nifty is 10350 and 10276, resistance at 10700 – 10600 and 10530
It is not clear if the market direction is back to being positive for the near term. World markets traded mixed on Thursday. But, on night Down Jones closes -4.2% lower because the bond yield crosses the 2.85% (Monday High) and comes at 2.88%. Sell off because the bank of England taken the hint to increase of interest rate. This also creates panic in the market. Dow Jones corrects around 10% and lost his all gains of this year. Average correction of last 1 year i.e. 5% crosses, more pain is behind.
There could be more pain in the global markets as people who were shorting volatility with leveraged positions in the US may still have to unwind.
It is a big emotional test of…risk tolerance; we all want the upside but remember there is downside risk and goals, risk tolerance and time frames must always lead one’s investment decisions. Don’t be scared, and don’t be impulsive. Be disciplined no matter what the market environment, and keep saving and investing according to your long-term plan.