On Friday, Post Railway Budget presentation the markets went up and closed at higher levels of the day. As such there were no such great proposals for this surge so it can be assumed that it was mainly in anticipation of the favorable Union Budget proposals.
Before giving my view I would caution that markets will be very choppy, so best is not to trade and concentrate on the Budget Speech. Thereby you can avoid getting affected by the intra day volatility and have better understanding of the long term Budget implications. Having said this, I will now make a humble attempt to give my view only on NIFTY FUTURE for Monday.
No doubt Nifty Future close has been very positive for a good opening on Monday, plus there is no negative guidance from US markets as they were closed on Friday. Nifty Future has to first go above 4456 and the next major resistance will be 4500. I would consider the odds to be very high of a new top i.e. above 4700, in the coming days, once market closes above 4500.
On the down side, break of 4360 should be considered as first signal of weakness. The next support levels will be 4310 and 4280. Close below 4280 should be considered bearish as the markets can go down till 415o to retest the recent low. At 4500, Nifty Future will face resistance of .618 level, compared to that, Reliance is at about 25% level. I would consider that for Nifty to close above 4500, Reliance has to move above 2100.
Unless there is some out of the box thinking type item in the Budget Proposal, I doubt if Nifty could find strength to close above 4500 today. Needless to repeat, that US Markets continue to show weakness, which will accelerate below 8200.
With best Wishes,
Ketan Asher.
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