Market Update: Currency of any country exposes the underlying state of the economy. Like I've always maintained (ever since USD/INR was trading at 53-54 levels) that our currency will be the first asset class to expose the underlying state of our economy. Equity markets and other asset classes will follow suit. Since, 2010, INR has depreciated by 42%, whereas Equity markets did fall 28 % but has ever since retraced most of the losses. However, since then INR has continued to depreciate further. Simple maths, considering the quantum of INR depreciation, would put out a target of 4000 for Nifty. In the current scenario, although a target of 4000 looks far fetched; looking at the current state of the economy , one cannot rule out this possibility! Interesting times ahead and let the market do the talking.
Coming to Nifty at present... Technically speaking, Nifty is currently in a no trade zone wherein strong whipsaws are possible. A close below 5730 will give the first opportunity for aggressive traders to go short in the market. Conservative traders need to wait for a breach of 5566 to go short. Breach of 5566 will lead to capitulation setting into the market with a downside target of 4900. Breach of the recent high-5904 will negate this view. All the best to your trading!