Markets Continue to be in a Range

Fundamental View on Indian Markets

The Indian Markets have not been able to breakout in either direction since the January crash this year.

Its been moving in correlation with the US markets since couple of months now. The US markets on the other hand has surprised us with upwards move despite Crude Oil prices rising vertically & hitting life time high levels on consistent basis.

If Crude Oil recedes, then global markets will start seeing some relief. Equities have shown a 5-months underperformance. So, there will be more allocation to equities. All eyes are on what is going to happen in oil in the next few days.

The dollar rose approached a two-month high versus a basket of currencies, boosted by a slight rise in risk demand and growing speculation that U.S. interest cuts may be ending.

Inflation rose to near 44-month high of 7.83 per cent for the week ended May 3, against 7.61 per cent in the previous week adding more concerns.

Technical view on Indian Markets

Post the Nifty relief rally from 4600 levels in April to 5300 levels in May, the markets took a breather at beginning of this month & Retraced to 4950 levels.

It again showed a rally & closed at 5157 on the last trading day of the week , amidst a choppy trading session. Thus making higher highs on charts which is always regarded as a positive sign & shows strength.

Important levels to watch out for Nifty in May are 5050,5000 & then 4900 on the downside(below which Nifty can test its January lows) & 5300 on the higher side (above which 5365 seems possible).