By V K Sharma
The markets continue to be in s tight bear hug. The Nifty has closed lower at 23,092, losing 0.48% for the week. The benchmark is cruising below all its major averages. With just one week left to go for the month, the Nifty is down 2.34% for the month.
If the Nifty closes January in the red, this will be the fourth monthly loss on the trot, a dubious feat not seen in the last 8 years.
There have just been five instances since the Nifty’s inception since 22nd April 1996, when the Nifty has fallen for four or more months consecutively. Only one out of those five instances has been a trail of five back-to-back monthly declines which was seen in its inception year. It had fallen continuously for five months from July to November 1996.
The fall in the Nifty during those five months in 1996 was to the tune of 26%. In contrast, the Nifty has fallen a mere 12.12% after 3months and 3 weeks, in the current slide.
Investors need to appreciate the fact that even if there is a break in this streak of continuous slide the fall can resume after a brief respite.
The accompanying chart is a daily chart, and support is seen at the low formed on 21st January at 22976. But to appreciate the real danger you will have to look at the weekly charts, with support at 21281, the low registered on the counting day of the Lok Sabha elections on 4th June 2024.
On the higher side, the field is full of resistance. The first one is at 23426, the high of the large red candle made on 21st January and then the level of 23600 on the trendline no 42.
Coming to the Smallcaps, the situation continues to be worse. While the Smallcaps Index is down 14% from the top, the median fall is 44% from the highs.
Trump used his Davos appearance to ask the OPEC to reduce oil prices something he believes will reduce the ability of Russia to continue the war in Ukraine. While the cartel is yet to react to the wish, they have said that a plan to raise oil production from April is already in place much before Trump’s request.
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