2 March 2020: View on global markets

Global Stock Indices

Since January 2020 we had been clearly saying that the uptrend is a bull-trap and a crash was overdue. We had mentioned that this would be a repeat of 2008 and S&P500 could drop down to 2850. S&P500 made a high of 3397 and crashed by 12% in the previous week. There onwards, it started to recover (S&P500 made a low of 2855).

The week ahead is overall positive till Thursday. If S&P500 doesn’t breach 2855 then it can move up to 3050-3100. If NASDAQ doesn’t breach 8100 (Friday’s low) then it may move up to 8600. If RUSSELL doesn’t breach 1420 then it can move up to 1540. DOW has support at 24500 and resistance at 26000. We are overall positive with volatility till 18^th/20^th March 2020. Here onwards, market will remain supportive till third week of June 2020. Investors should be ready to make their investment in a couple of instalments. By June third week, book profit in your long position.

If S&P500 breaches 2855 and closes below 2820 then it can drop down to 2600 or below.

In this week, uptrend with volatility is indicated till Tuesday. On Wednesday-Thursday, trend is positive. On Friday, a correction is possible.

Last Friday, we asked you to buy call options at lower levels. Hold call options with S/L 2855 (S&P500) for target 3000-3050-3100.

Precious Metals

On Friday, Gold made a low of 1576. It has support at 1550 and resistance at 1604. Major resistance lies at 1620. We are still of the view that by March-end, Gold may cross 1700-1740. Silver May contract has support at 16.20 and resistance at 17.25. By the end of month, Silver may cross 19.00. We are positive for precious metals till 10^th March.

Crude Oil

We are positive on crude oil for the week ahead. Crude may move up to 49. Support lies at 42.40. From 8^th March, we are seeing a considerable uptrend that may drive it to 58-60 by the end of month.

IMPORTANT NOTE:

We had been clearly calling for a 2008-like situation in 2020 and a bull trap at higher levels for S&P500 along with other indices such as Nifty. We were predicting that Nifty might drop down to 11200 in Feb while S&P500 could drop down to 2850. Most parts of February were bullish but from 19th, it started to fall.  Last week of February sessions observed the worst downtrend in history.