Stock market and bullion for the week starting on 3rd February 2020

Global Stock Indices

Last Friday, coronavirus fear provoked the market to selloff in global markets. S&P500 made a low of 3213 and closed at 3227. The week ahead is positive. DOW closed at 28227. NASDAQ closed at 9012. RUSSELL closed at 1617. Chinese market will open after one week on Monday. S&P500 may witness weakness in the morning wherein it can drop to 3200-3190 (as an after effect of the possible downtrend in Chinese market after the holidays). It is advised to long S&P500 at lower levels. Quick recovery is expected. US opening will be at higher levels this Monday. On Tuesday, market shall be bullish. On Wednesday, there is a chance of slight decline. On Thursday, trend is again bullish. On Friday, it is the non-farm payroll announcement. There onwards, a downside risk is indicated. Major selloff may be observed. On the higher side, S&P500 can move up to 3280-3290. Around these levels, you can book profit in long position and enter into short position and cover it by Friday’s closing.

At Friday’s closing, you can make 50% long position for next Monday.

At Monday’s US opening, you can buy the following stocks:

• TESLA
• APPLE
• AMAZON

You can also long DOW, NASDAQ Futures at Monday’s Asian opening.

Indian Stock Market

Indian market witnessed a considerable selloff after the budget was announced on Saturday. The week ahead is bullish. On Monday, uncertainty may prevail in the morning session. There onwards, recovery is indicated. Flat to positive closing is possible. On Tuesday, market may trade bullish. On Wednesday, it is the RBI policy wherein uncertainty may prevail but closing is positive. On Thursday, it shall again be a bullish environment. On Friday, first half is positive but second half may witness profit booking. Next Monday is again positive.

Nifty has support at 11500 and resistance at 11800 while Bank Nifty has support at 29500 and resistance at 30500.

It is advised to long indices and stocks at lower levels. By Thursday or Friday morning, Nifty may cross 11900-12000 while Bank Nifty may cross 31000.

Bullion

Last Friday, Gold made a high of 1588 while Silver made a high of 18.02. On Monday-Tuesday, weakness is possible. At Monday’s opening, it may move up to 1595. It is advised to short Gold around 1595 (with S/L 1613) and Silver around 18.20. In the week ahead, Gold may drop down to 1550-1540 while Silver may drop down to 17.30. We should not be surprised even if Gold drops to 1530.

Around 1540-1550, cover short position in Gold and make 50% long position. Around 17.40, cover short position in Silver and make 50% long position.

On Friday, bullion is expected to trade bullish.