KEY POINTS:
- The Fed delivered on expectations, but Powell sounded dovish
- US-India trade talks concluded on a positive note, although there wasn’t any major breakthrough
- India’s Chief Economic Adviser sees a deal now closer than ever and could be reached by March
- Nifty 50 rises back above the key 25,900 level, shifting the short-term bias to bullish
FUNDAMENTAL OVERVIEW
The Nifty 50 has been rallying strongly since Thursday’s open. The Fed delivered on expectations cutting by 25 bps and signalling a higher bar for further rate cuts. In the press conference though, Fed Chair Powell sounded quite dovish as he downplayed the inflation risk and emphasised the labour market weakness.
On the US-India trade front, the talks that were held in New Delhi concluded with no major breakthrough, but the India’s Chief Economic Adviser said that a deal was now closer than ever and it could be sealed by March. India’s PM Modi spoke with Trump yesterday and described the conversation as “warm and engaging”.
Looking forward, next week we have the US NFP and CPI reports. Hot data could triggered a hawkish repricing for Fed’s interest rate expectations and weigh on global risk sentiment. That could also negatively impact the Nifty 50. On the other hand, weak data should see traders adding to rate cut bets and supporting equity markets.
NIFTY 50 TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can see
that the Nifty
50 is recovering some ground as a dovish Fed Chair Powell and hopes for a
US-India trade deal boosted the risk sentiment.
If the price were to rally back
into the all-time high, we can expect the sellers to step in there with a
defined risk above the all-time high to position for a drop into the 25,317
level. The buyers, on the other hand, will want to see the price breaking
higher to increase the bullish bets into new all-time highs.
NIFTY 50 TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can see
that we have a downward trendline defining the bearish momentum. The sellers
will likely lean on the trendline with a defined risk above it to position for
a drop into new lows. The buyers, on the other hand, will look for a break
higher to increase the bullish bets into new all-time highs.
NIFTY 50 TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we can see that the buyers
started to aggressively pile in on Thursday’s open and increase the bullish
bets after the break above the key 25,900 level. The short-term bias has shifted
to bullish.
If we get a pullback from the trendline, we can expect the buyers to
step in around the 25,900 support to keep targeting new highs
