Nifty has Reversed after Hitting 9261 level- What should be today’s strategy?

Yesterday fall was more to do with European Markets dismal opening in the afternoon. These markets were opened at a loss of more than 1% while we were trading. Now the focus has turned to quarterly earnings. Since the whole world is stand still due to corona virus cases. This will have a worse impact on weak quarterly results.

United States markets has seen worse trading day in the month of April. All the major indices have fallen sharply and with a loss of 1.4% to 2.5%. The reasons are:

  1. Stocks drop on Weak economical data – US Retail sales fell 8.7% in March 2020. This is highest drop ever and impacted by stand still economy.
  2. Empire State Index showed that the manufacturing in New York hit at a record low reading of -78.2.
  3. Also US companies quarterly season underway. Showing a dismal start and many companies are declaring weak quarterly results.
  4. Oil prices cracks below $ 20 per barrel after the International Energy Agency projected that global demand will be lowest in 2020 amid corona virus pandemic.

How Global Markets are Trading this Morning?

IndicesCurrent ValuePrev. Close% Change
Nasdaq (Apr 15)8393.168515.74-1.44%
FTSE (Apr 15)5597.655791.31-3.34%
CAC (Apr 15)4353.724523.91-3.76%
DAX (Apr 15)10279.7610696.56-3.90%
Nikkei (Apr 16)19305.0419550.09-1.25%
Straits Times (Apr 16)2602.892605.56-0.10%
Hang Seng  (Apr 16)23932.5724145.34-0.88%
Kospi (Apr 16)1848.491857.08-0.46%
SET Composite (Apr 16)1236.11256.35-1.61%
Jakarta Composite (Apr 16)4597.324625.91-0.62%
Shanghai Composite (Apr 16)2804.852811.17-0.22%
SGX Nifty (Apr 16)88748925.5-0.58%
Data from Money Control Time: 7.56 A.M

SGX Nifty is in Negative Territory

Today SGX Nifty is showing a down tick of -0.58% and opening of our market at 8800-8850 level on Nifty. This suggest that some weakness will stay at opening and the dismal quarterly result of Wipro has some dampening affect on the Markets. As it has seen weak quarterly results on both revenue and profit side. Today TCS is also coming with quarterly result.

We are of the view that our markets may experience a roller coaster ride where you will see that both up days and down days for the Indian Markets. The reason is that the corona virus will have a negative effect on quarterly earnings. This reinstate our view to create your long term portfolio in a systematic manner. To assist you, we have done analysis on Nifty 50 stocks.


Strategy of the Day

Most of the developed Markets have recouped half of the losses from their recent lows. Giving confidence to Indian investors to be on buy side and shorting the market is too risky. So this calls for ” Buy on every dip” we recommend you to keep a stop loss of 8750 and go long on Nifty future with a target of 8900 level. Do not trade on opening and wait for certain weakness and trade near this stop loss.

Why we are not saying to short the Market?

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