First and foremost thing...
VOLATILITY
As we all know, today is the day of volatile moves.... Already proven today with close to 1.5% movement already, and the Budget is not even started. Otherwise, the historical data shows that Budget day closing ranges between -3% to 4-5%.
Regarding levels, Nifty will have supports near 11900-11800 mark below which the sentiments would become completely bearish. In intraday, Nifty has opened with a lot of bearishness and created a low in the support area mentioned, near 11880, and sharply bounced back to trade currently above 12k mark, at the start of the budget... It's important to remember that, below 11800, material support finds itself only near 11500
On the higher side.... 12060-12110-12170 will act as strong resistances for the index.
I feel, irrespective of the technicals, advisably, the bias for today should be " Stay Away" from the markets, as the volatility is already near 17.5% with resistance near 19.20%
So trade unless something is very concrete to be traded upon, else it's better to stay away and enjoy the Budget in a weekend mood... :)
However, for those who desperately want to trade, my suggestion is not to short at current levels and wait for supports to be broken sustainably, and going long on dips with supports as stop losses. Still, would want to reiterate, it's better to watch today's trading session from outside the markets, as it's just a day, and wouldn't cost you much...
Personally I feel, real estate, Pharma, healthcare, banking, FMCG, agri stocks (fertilizers, etc), railways are the sectors would be trading with a positive bias... Any announcement on Income Tax Slab, or corporate tax, which is already expected atleast for Income Tax, would be cherished and applauded by the traders, respectively with the quantum of the announcement. Also, any positive announcement on Dividemt Ditribution Tax or the STT would take markets to even a new high. However, I fear, lack of any concrete announcement on tax front, may really hammer the markets down.
All said and done, please remember the analogy I keep quoting in my posts, Buy the rumour, sell the Fact... And as the markets have already given a bit of correction already for past couple of weeks, provided that we have a balanced or even neutral Budget, one should trade with a positive bias starting next week, provided the levels are adhered to.... With extra volatility, the levels might be changed, and I would inform the same in the next post, if any material changes takes place...
Cheers
Hrishi....
