Expect more volatility this week; be stock selective: Aamar Deo Singh, Angel One

economictimes.indiatimes.com:

While stock markets have discounted the Fitch downgrade, mixed global cues coupled with a spike in crude oil prices post Ukraine’s drone hit on Russian oil installations, could trigger high volatility in coming weeks, says Aamar Deo Singh, Head Advisory at Angel One. Being selective in investments will be key, he adds.What lies ahead for Nifty after falling 0.66% this week on Fitch factor? Is that priced in now? Most of the major global markets closed in the red last week, on the back of the downgrade of the US credit rating to AA+ by Fitch.

Also, disappointing numbers by Apple added to the pressure on US markets as its stock fell by almost 5%, its biggest daily percentage decline since September 2022. Fitch had already given indications of a downgrade in May itself when it had placed United States’ “AAA” on rating watch negative, so it was clearly in the public domain that a downgrade could follow anytime.

On Friday, domestic markets recovered to close in the green and it appears that markets have discounted the same, and will be governed more by corporate earnings going forward. Further, a spike in crude oil prices post Ukraine’s drones hitting Russia’s oil production capacity, could also add to the existing volatility in the markets in the short-term.What are the technical triggers for Nifty, Bank Nifty? Technically speaking, there is clearly a very intense tussle going on between the bull and the bear camp, as evident on the charts.

At the same time, there are some bearish patterns on weekly charts, both on Nifty & Bank Nifty, indicating that for now, the bulls will have to be content with the recent tops not being breached easily. However, the saving grace is that the downside also appears to be strongly supported