Markets for the week 6th to 10th June

As stated earlier last week if Nifty holds 16450 market will be positive and upside range was mentioned till 16800. 

This week markets gapped up above 16450 and the weekly high which was today was at 16800 dot after which we saw a sharp sell off.

Nifty was supported by RELIANCE majorly and IT SECTOR. RELIANCE has been rising on account of strong International GRM and IT sector was a bounce from the oversold zone. 

Bank Nifty has underperformed all through the week. With no participation in the rally.

Fertiliser stocks have underperformed. There are talks of Fertilizer imports from Egypt in exchange of Wheat Exports from India. This may cause pressure on Indian Fertiliser Stocks 

Cement Sector has gone down because of Capex plans of Ultratech and price war anticipation due to entry of Adani and over supply due to Capex increases. and approaching monsoon which will bring muted demands. 

Auto Sector is facing resistance from upper levels. Auto numbers looked priced in for all major stocks. Only good auto stock is Mahindra & Mahindra and TataMotors. However they are also on extended rally. 

Export Data and PMI data have been encouraging however the trade deficit has increased on account of Rising Dollar and Crude Oil Prices, which brought down the markets today. GST collection as usual has been on record. 

*Now for the next week.*

Nifty has a very strong resistance at *16800* the next rally will begin only above that. 

Nifty has a short term base at *16450* Nifty will completely reverse and move into a bearish trajectory if it break *16250* on the downside. However the bias is still positive. 

Bank Nifty needs to take 36000 decisively for it to participate in the rally. 

However selling pressure in HDFC bank due to stake reductions, Axis negative news flow and muted Q4 of PSU banks are capping the upside for Bank Nifty. Management change (next in charge after Uday Kotak) at Kotak Bank is also something which the street is looking at. 

Globally the GRM’s are a new high and this has brought the rally in MRPL, Chennai Petro and Reliance Industries. 

The *US Markets* are facing a small resistance at 4175 on the *S&P500* and that is a level important to cross for the Bullishness to continue. 

BOTH THE INTERNATIONAL AND INDIAN MARKETS ARE INDICATING ANOTHER RANGEBOUND WEEK IN THE COMING WEEKS.

*Performance of Markets majorly depend on Inflation path, globally fuel, food and commodity prices are causing margin pressures*. Markets which have rallied by on an average 200 to 300 percent in the mid and small cap space will see tough resistances as the margin are under high pressure and would continue to remain so for a quarter more. 

MANY RESISTANCES ON INDICES FOR A BREAKOUT TO OCCUR. MAJORLY INFLATION AND WAR. 

Mid cap commodity stocks are seeing crazy swing with Intraday run up of 10% and also a drawdown of 10% on account of commodity prices. Raymond saw a 10% rally only to fall by 12% the next day. And many more such stocks. 

Clear view on the market is absent. Another major concern is the rising COVID cases in India.

DISCLAIMER : THIS IS JUST A PERSONAL VIEW, PLEASE CONSULT A FINANCIAL ADVISOR BEFORE INVESTING. THESE ARE NOT RECOMMENDATIONS. MARKET INVESTMENT ARE SUBJECT TO RISKS.