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While the Dow might have closed 84 points higher after the US FED hiked the discount rate from 0.50% to 0.75% the Asian markets have not really taken it kindly especially Hong Kong. It has fallen by 1.6% as we write this Market Outlook. Others are also down but not much; however, South Korea is giving company to Hong Kong, it is also down by over 1.3%.

The SGX Feb Nifty began the day above 4900 but now it has plummeted to 4863 level. A crucial support area. Chances are we would see lower levels in our market if this level of 4863 is not held by the Nifty.

Today, we need to see if the Nifty trades below 4873, if it were to do so then it would indicate weakness and we should expect further fall. Below 4863, we can expect support coming at 4839 and at 4821. Once 4821 is also breached we might have to be ready for 4790. All this may not happen today but the fact that this time in this rally we had a lower top of 4929.70 on the day before while earlier high in this intermediate downtrend corrective swing had been at 4951.15. This clearly shows that unless we see the Nifty getting past 4951, it is the intermediate downtrend that is continuing.

The Nifty Put-Call Ratio continues to remain unchanged at 1.09 indicating the current rally to be an anemic recovery and it also suggests that the bears might well start dominating the scene any time.

Now, in any recovery attempt watch out for the supply pressure between 4916 and 4939. Unless this range is decisively crossed selling at higher levels is a better deal.

Rajat K. Bose