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- Rally To Continue, Declining India VIX Positive; Nifty May Remain In The Range Of 15,500 To 16,000 Point Next Week
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- Increasing weakness in India VIX is indicating to make a buying strategy on every fall
- Due to unlocking, gold may be seen crossing the level of Rs 49,000 per 10 grams.
- Crude rises on hopes of a sharp recovery in the economy, will strengthen if it stays above Rs 5100 per barrel
The domestic stock market, which went to a record high level this week, may continue to rise. The futures market deals are showing signs of taking new positions for bullishness. Nifty may remain in the range of 15,500 to 16,000 points next week. The decline in the volatility index India VIX is also indicating a continuation of the bullish trend.
Increasing weakness in VIX, buying signal on the decline
India VIX shows how much movement the market can expect for the next 30 days. This week it fell 11.54% from 15.94 to 14.10. It has decreased continuously in the last 17 months since February 2020. The increasing weakness in VIX is indicating to make a buying strategy on every fall.
FII bought shares worth over Rs 1,738 crore
Foreign institutional investors (FIIs) were buyers for most of this week. He bought shares worth a net Rs 1,738 crore last week. Domestic Institutional Investors (DIIs) sold shares worth a net Rs 823 crore. FII reduced the bets on the index futures while increasing the deals in the shares.
Slowdown in the bullion market amid the boom in the stock market
As far as gold is concerned, it has gained a slight gain of 0.10% this week. The bullish pattern of higher highs that has been forming for the last five weeks has had no effect. The bulls showed sluggishness in the bullion market amid the rise in the stock market.
Gold may cross Rs 49,000 level
The demand for gold will increase in the coming days after the restrictions related to unlocking and Kovid are removed. If this happens, it can be seen crossing the level of Rs 49,000 per 10 grams. Silver rose marginally by 0.92% last week.
IT stocks benefited from rupee’s weakness
The rupee weakened against the dollar this week. IT companies got the benefit of this in the stock market. BSE Sensex and NSE Nifty made new all-time highs this week. It also benefited from a reduction in new cases of infection and an accelerated vaccination campaign.
Hope for a fast recovery in the boosting economy
This week, the price of crude oil gained 2.70% on a weekly basis. In this, a bullish higher high and higher low pattern is being formed for the last three weeks. The expectation of a faster recovery than expected in the economy is boosting its strength.
Support will be found at the level of 4,990 in the fall
Crude oil is trading at its highest level in several months. If crude remains above Rs 5,100 per barrel, it will strengthen further. On the downside, buying support will be available at the level of Rs 4,990.
There was a slight improvement in the Dow Jones on Friday
There was a slight decline in the US stock market this week. The Dow Jones fell 0.79% on a weekly basis. The US market remained sluggish throughout the week and on Friday, it improved marginally due to buying in the big stocks of the index. Investors are considering the rise in inflation as temporary. They will be waiting for the analysis of employment data.
(Chandan Tapdia, Vice President and Derivatives Analyst, Motilal Oswal Financial Services)