Caution alert for investors

The period under review April 6-12 saw markets continue their upward move. The week consisted of four trading sessions and saw markets gain on all four sessions, though the pace of rise seems to be showing early signs of slackening. BSE Sensex gained 703.46 points or 1.18 per cent to close at 60,392.77 points, while Nifty gained 255.35 points or 1.45 per cent to close at 17,812.40 points. Markets as of Wednesday gained for the last eight days in a row.

Dow Jones gained on all four days of trading that were there. Friday was a holiday in the US as well. It was up 282.41 points or 0.85 per cent at 33,684.79 points. Today (Wednesday) would see inflation data being released in the US markets which is crucial for the US markets as well as the rest of the world.

The IMF has released a report on global inflation which has peaked in 2022 and would taper downwards in 2023. At the same time, they believe that there would be a significant drop in GDP of the world economy from 4.4 per cent to 3.8 per cent and advanced economies from 3.9 per cent to 2.6 per cent. It is worth mentioning here that they expect emerging markets and developing economies to have a minimal impact and GDP to drop from 4.8 per cent to 4.7 per cent. On the monsoon front, Skynet believes India would have a below normal monsoon, while IMD believes that the monsoon would be normal. Too many ponderables, and to top it all, crude oil prices are on the rise once again. Will markets once again climb a wall of worries?

TCS will be declaring results on Wednesday and Infosys on Thursday. Post these two mega results, the IT sector outlook would become clear, but we would have to wait to see how other sectors perform. The expectation is that with commodity prices softening, results for corporate India would be better. One needs to keep fingers crossed and hope for the best.

Coming to the April 13-19 period ahead, it would have four trading sessions with Friday being a holiday. The rally which as of today is eight days old has been quite swift and sharp and saw BSE Sensex gain 3,000 points, while Nifty gained 900 points. After such a rally, one normally expects consolidation at best or correction at worst. If neither of these happen, there has to be very strong news flow which could drive the markets. At this point of time, one is found wanting in the news front.

Expect markets to turn sluggish, await direction from overseas cues and results, which would be declared. Sideways markets with some sort of downward pressure in general would be the order of the day. Key resistance for the markets would be at 17,850-900 on Nifty and at 60,550-60,700 on BSE Sensex. If these are breached, then the next levels would be at 18,050-18,100 and at 61,100-61,250 points. On the support side, the immediate levels are at 17,550-17,600 and at 59,800-60,050 points. In case this is breached the next levels would be at 17,250-17,300 and at 58,800-58,950 points.

There would be a decent level of clarity when trading begins Thursday morning or at the time of you reading this article about the outcome of the US markets. Trade with low positions at the end of day tomorrow and prefer to have intra-day positions rather than overnight positions in the coming week. Trade cautiously.

(The author is the founder of

Kejriwal Research and Investment Services, an advisory firm)