This morning SGX Nifty is suggesting a positive start of Indian market on the back of strength in global markets. Yesterday US markets have closed with a gain of 7% to 8%. As investors have taken clue on the reduction of death cases due to corona virus cases. They feel that there may be high probability of peaking of corona virus cases due to lesser people have died in last three days in US market as well in other countries like Spain, Itally, Germany & UK. In our opinion, this is too early to predict the peaking of the cases and this may trap investor on the long side.
For India, the number of cases has reached to more than 4000 and new cases added is also high with more than 700 cases. There is also a fear of community spread of this virus.
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What should be your strategy for the day?
Today strategy is to go long in Nifty future. Do not open the long position on opening price of Nifty as today it will open with more than 300 to 400 points. The best way to trade is to “Wait for Dip at 8200-8300 Nifty level” and then go long on any strength at these level. We are expecting a rally on the back of short covering. Target for the day is 8500 with stop loss of 8100 level.
This is just a bear market trap as probability of moving down is still high as the cases can increase any time. So be cautious while trading and maintain strict stoploss.