Market View – Feb 2020 (Coronavirus)
“Market continually changes. It also reminds me to look for investments opportunities in different markets, rather than keep going back to a well that is dry.” – Robert Kiyosaki
Global Equity market and Brent Crude are falling, Gold and Silver price are flying, U.S treasury yields reached to their lowest level since 2016, as coronavirus cases spread outside China, darkening the outlook for world growth. According to Reuters tally, the virus has now killed more than 2500 people in China and has spread to 28 countries and territories around the world.
Nifty 50, as forecasted last month, has made a medium-term peak of 12400 in Jan 2020 and likely to move downward in coming days.
Along with Coronavirus fear, Indian equity market was disappointed by Budget due to which NIFTY 50 Index failed to hold the strong support of 11700-11800. Now the recent uptrend which started from Sep19 had been halted, it will be difficult for market to hold the levels above 12200 (I forecasted the same on 20th Feb 2020 at level of 12100, to read, go at the bottom and click on Post 2). I believe Nifty 50 is likely to re-test the recent low of 11600 made on Budget day and if Domestic and Global sentiments will keep on deteriorating, we might see level of 11100 as well.
BANKNIFTY Index is still looking weak, it was the first Index to peak out in Jan 2020 (I forecasted the same on 1st Jan 2020 at level of 32300, to read, go at the bottom and click on Post 1). We are likely to see levels of 29000-29500 in coming days. Although level of 28500 can act as a strong support incase of any global selloff.
NIFTY IT Index is flirting around 16500 levels from last few weeks but is unable to hold above these levels. As suggested last month I am expecting a big move from here and which now seems to be downward. Level below 16300 will act as a confirmation for medium term target of 15000, uptrend can resume above 16750 only.
Nifty Midcap 50 Index as forecasted in the last month article, will not be able to cross 5100 before Budget. Along with large caps, it is also showing weakness and likely to see levels of 4500-4600 in coming days.
Nifty Auto Index which was one of the sectors to turned up before Nifty 50 in Sep 2019, is now looking very weak. In near term 7250-7300 might act as short-term support.
Nifty Realty Index, as recommended in last month article will not be able to hold above 330 levels, collapsed by 9% in single day.
Nifty Metals Index was badly hit on global cues as coronavirus is likely to impact Chinese economy which is the largest Metal consumer in the world. In near term 2200-2400 will act as strong support on downside.
Nifty FMCG Index, which was showing a sign of revival is now looking weak again. In near term 29000-29500 will act as a support.
Nifty Pharma Index is unable to hold above level of 8500, below these levels it looks weak.
BSE Oil & Gas, is moving down towards the support of 12500-13000 levels.
Last month I forecasted Dow Jones Industrial Average to correct from 29350 levels (I forecasted the same on 21st Jan 2020, to read, go at the bottom and click on Post 3), post which it got corrected by 4% to 28170 levels before bouncing back to new highs and is likely to fall again. This time we will see levels of 27000-27500 in short-term.
Dollar Index was showing strength but sharp rally towards 100 in such a short period came as a surprise.
I continue to hold my upward forecast from last month on Silver for a target of $19.50/ounce in near term.
I continue to hold my downward bias on Brent Crude, in near term we are likely to see level of $50/barrel.
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