NIFTY - Pre - Budgetary AnalysisHello Traders,
I hope this message finds you well. I am pleased to share an insightful analysis with you, which illuminates the continuation of the market shift in accordance with the budget.
Preliminary Analysis Overview:
The correction initiated on September 27, 2024, comprises three phases and bottomed out at 22,786 on January 27, 2025 (~120D) . Given the recent decline, it is considered a correction within a correction, and we anticipate a retracement to higher levels before resuming the trend in a more significant manner.
The analysis is supported by the fact that a crucial time resistance for the down trend lies at 17 February 2025, where the market is anticipated to conclude the ongoing correction phase and initiate a new trend.
Phase I:
Following a brief rally in the pre-open and open periods, the market is expected to decline towards lower levels between 9.15 - 11 AM to the following levels.
SI: 23,300
SII: 23,140 (Stronger)
SIII: 23,041 (Potentially for extension to 23,000)
*Please note that these values are indicative and not actual.
Phase II:
Following the completion of the internal correction, the market is anticipated to resume its current interim upward trend in a more significant manner to test the 38.2 R 24,120 levels) + static support.
R I – 23,950
RII – 24,120 ~ 24,225
*These values are not actual but merely levels.
**Budget commentary that I expect: **
1. There will not be any change in corporate tax rate.
2. Personal IT may see a small slab change, accompanied by an increase in standard deduction.
3. No changes to STT, LTCG / STCG (revision(s) will undermine the integrity of the decisions from FM).
4. Reduced borrowing costs accommodating leveraged capex.
5. Incentivization (PLI, infra, agricultural & make in india).
6. Semi conductor push.
Overall, I am expecting a neutral budget – Neither hawkish nor dovish.
The markets will do what they have to….!!!
**Important Note:**
This entire analysis holds true only until the market breaks 22,786.90, although I believe not today.
** Final Verdict: **
The current uptrend is considered interim. The primary trend remains downward and is anticipated to persist further and deeper. This trend is expected to test the 38.2% support level coinciding with the 22,146 ~ 21,245 -support level.
**Strategy:**
Given the implied volatility increase, it is prudent to adapt to changes as they appear to transpire.
1. Sell until phase I.
2. Buy for phase II (Conservatives may await some confirmation with strict SL @ 22,786).
3. Exit any open position after phase II completion and await cues.
Fellow Traders,
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Wishing you profitable and fulfilling trading endeavors!
Disclaimer:
Before concluding, I must emphasize that the insights shared are based on my analysis. It is imperative that you conduct your own research and, if necessary, consult with a financial advisor before making any trading decisions. The dynamic nature of financial markets necessitates that your strategies align with your financial objectives and risk tolerance.
