29th March 2020-Sunday, 6:01 pm

Hi readers

My humble and sincere request to all the readers of this article, to obey the Government curfew and stay@home till 14th April'20, to avoid further consequences and complication, either in the economic front or on the social front, our health is very, very important to all of us, with a unity we will come out of this situation very quickly and have a positive hope to return normal life very soon.

I am once again re-iterating that, this article is written to share some of my personal views based on the fundamental and technical knowledge, what I acquired in the last 15 years of experience in the stock market as a full time analyst and not to panic anyone, I have witnessed/seen the worst market corrections during 2006,2008 and now 2020.

Almost two weeks were gone, from the day i.e.16^th Mar’20, the latest Nifty special bulletin published, the Nifty Index is trading as per our calculation, tested the first level targets on the first leg of correctiin till 7988 and moved till 7511, the counter move started with the Govt economic stimulus hope and Reserve Bank of India-RBI, move to control the sinking economy by reducing the Repo rate-Inerest Rate by 75 Bps points to 4.40 percent and cutting Cash Reserve Ratio- CRR by 100 Bps points to 3 percent and financial moratorium for three months for all the loans and EMI payment, these steps to prevent the damages already happened in the economy due to Covid-19.

Covid-19 (Corona Virus) pandemic as of now till 6:00 pm-29.03.2020, affected around 200 countries, across the world, the total number of affected cases stands at 680,200, the total death cases reported as of now 31,907, the USA leads the number one position in corona virus affected cases i.e.123,781, whereas the country Italy leads the number one position on death cases i.e.10023. Though our country is not much affected till date, the total number of affected cases are 987. Since, we are in the incubation period, which will end by mid April, the measures what we are taking right now, will give the answer only by 10^th-14^th April, whether the affected and casualty curve is rising further or moving down.

As on date, 987 corona virus infected cases reported in India, the curve steeply rising northwards day-by-day. On 16^th March it was 119, as of 28^th March it reached 987, the average increase in a day between 16^th March to 28th March is standing at 66.79 cases per day, watch closely this average level i.e. 66.79, this average level should not move above 67 cases, in the coming days else, the curfew may be extended another 8-13 day period from 15^th April and may see one more extension also till mid May’20, if warranted. Am saying this, based on the Chinese model of 60 days lock down, they imposed the curfew on 23rd Jan 2020 and from this week, they started to relax the curfew in phased manner, which is almost 60 day of lockdown. The way, the poor people/workers behave without fear and social responsibility, moving one place to another place with a large crowd by breaking the rule, raising the question about the social distancing, which is creating more panic situation. 

How this Covid-19 is affecting our economy and how the Covid-19 aftermath will impact on our economy ?

No sales, no revenue, no income, no GST collection, no customs duty collection, no income tax collection.. this is the current and also for another 2-4 months scenario, to the Government of India... no other go, except spending.. only spending... more spending to safeguard the people.

All business, service, manufacturing and agricultural activities are in total shut down, this is not the condition in India alone, it is prevailing all over the world including USA. We, India is more service oriented country largely depends on IT Sector with more youth population and their income should come from other developed countries, which are now facing the worst and many software companies and BPO segments are closing down which will reflect in India, already I heard that some Banglore based firms are closing down the operation and fired all the staffs.

The USA unemployment rate recently released i.e. 5.50 %, were alarming one, a record 3.30 million Americans applied for unemployment benefits last week and saw the biggest jump in new jobless claims in history, surpassing the record of 695,000 set in 1982. Many economists say this is the beginning of a massive spike in unemployment that could result in over 40 million Americans losing their jobs by April'20.

Now, the big question is lingering in every one’s mind is the ongoing correction has bottomed out with a low made on 24^th March-Friday i.e. 7511.10, since it recovered quickly i.e. in four trading seesions and reached 9038.30 on 27th Mar'20.

Please, refer and read my earlier special bulletin dated 16^th March’ 2020, I clearly written that, we are, globally entering into the economic recession, the same was confirmed by the International Monetary Fund-IMF Chief Ms. Kristalina Georgieva said on 27^th March. "It is clear that we have entered a recession" that will be worse than the one witnessed in 2009 following the global financial crisis, she said in an online press briefing. (to read further please visit our Blog page)

This ongoing stock market correction, resembles the January 2008, Financial mess due to sub-prime crisis, which was prolonged throughout the year i.e. till December 2008. The Nifty Index peaked 6357.10 on 08^th January 2008, started the correction, ended the first leg on 22^nd Jan’2008, corrected till 4448.50, further the consolidation with the down move dragged the Nifty Index, to the lowest level 2252.75 on 27^th October’ 2008, this overall correction is about 64% from the peak level or we can say, almost two third level from the high point i.e. 6357.10.

As I said earlier, in my 16^th March’20, special bulletin, it is just a beginning, we may see the worse in the coming months with the more downside move, if the Nifty index trade, sustain and closes below 7500 for three consecutive sessions then, it may test 7340-6825-6357-6140-5400 and the ongoing correction may pro-long the move till December 2020 with high volatility. On the other hand the upside swing got the potential to re-test 9038-9390 if trade, sustain and closes above 9390 for three consecutive trading sessions then, 9510-9950 are possible upside levels.

The trader/Investor those who invested till 7500 levels in the Nifty Index, try to book profit till 8900-9400 and stay neutral to invest again at 7300-6800-6350 levels and choose the sectors viz., IT, FMCG, Auto, Pharma and some private Banking stocks on a selective basis and book profit partially then and there and avoid metal, Infra, realty and PSU (Public Sector Undertaking) stocks.

I personally request the readers, to forward this article to your near & dear to get benefited by reading this and it may help them in many ways.

Please read carefully, the Disclaimer published on the Disclaimer page. Wishing you for a safe and secured trading.