Week Ending 29th December 2023

Dear patrons, by the time this blog reaches you the year would almost be over. What an year for the markets this has been! Stellar performance by all indices over the last few months was witnessed. Almost all indices posted new lifetime highs. Benchmark Nifty has been on a roll, adding to wealth of investors every passing day.

Indian economy is also outperforming global peers by some distance. India's CAD (Current Account Deficit) has also narrowed to $ 8.3 bn from $ 9.2 bn Q on Q for July-September quarter. Decline in CAD was on account of lower merchandise trade deficit and higher services exports. Flow of good news on economy front has been incessant and so has been the rise of the Indian capital markets. We expect this trend to continue and gather more momentum every passing quarter with rising industrial output, once manufacturing also starts to contribute sizably to the economy. Good time is ahead for investors.

Globally not much action was witnessed as the Holiday fever took over. The US indices remained range bound with a positive bias.

In the last blog we had predicted that markets will remain volatile with a positive bias with the December expiry in sight. You may read about it here Weekly Market Update: Week Ending 22nd December 2023 (amitbajare.blogspot.com). As mentioned in the previous blog Nifty did end the year on a high and posted highest weekly closing. Once Nifty broke the barrier of 21600 the move towards 21800 was swift.

Let's see what charts have in store for us in the new year.

For the first time in the week Nifty did not make a higher high on Friday. Nifty looks fatigued on charts and RSI also suggests so. We may witness some fall in Nifty over next few sessions. 21500 should act as first support if indeed some correction sets in. If Nifty closes below 21500 further down move cannot be ruled out with strong support around 21000.

BankNifty is also showing some tiredness. RSI is also showing divergence as in case of Nifty. However, it should find first support near 48000 not far from current closing. Close below 47900 may open further downside for BankNifty with strong support around 47100-47000 range.

Time for traders to become cautious and follow strict stop losses. Booking profits whether big or miniscule and remaining cash ready looks to be the most prudent strategy for traders to make the most of any corrective move on the bourses.

Long term investors may get their portfolio's health checked and look to switch from underperforming stocks to outperforming ones and stay invested.

Happy Investing!!!

Wish you a very happy and profitable new year!!!

"I am very opinionated and sometimes a very irritating character but, I have learnt that the quest to learn is a journey, not a destination." ~ Rakesh Jhunjhunwala

P.S.: This communication is for educational purpose only and does not recommend buying or selling any stock or index. Trade at your own risk.

Week Ending 22nd December 2023

Dear patrons, yet another stellar week has passed on the bourses, with the benchmark index posting new "All-Time-High". It has been a dominant display by the bulls for yet another week, barring an exception of the mid week session where, Nifty lost close to 2% witnessing year's biggest intraday fall. Bulls. however took charge in late hours during the penultimate session and continued to take markets higher.

There was a sharp fall on Wednesday, wherein Nifty touched an "All-Time-High" and slid quickly and sharply. A number of attributions were given for the fall. RBI's announcement that Indian inflation was above its expectation and may need some more time to come down might have spooked the markets, leading to a healthy fall. On the other hand IMF restoring faith in Indian economy and declaring India to be fastest growing large economy restored some faith and we saw markets recover on following days.

Globally, there is optimism that interest rates world over may stabilize and we may witness rates coming down sooner than later. This optimism lead to a rally in almost all the developed as well as emerging markets.

Another good news from the world of investment is that India Weightage increased from 7.7% to 16.6% in MSCI EM. This FPI money will get pumped in Nifty 100 stocks. Which can trigger a big rally in Large Cap & Larger Midcaps.

Let's now have a look at the charts and try to figure out what lies in store for the last week of the year.

We can clearly see Nifty recovering from a fall in the above chart. We had suggested that Nifty has resistance around 21500-21600 level and strong support around 21000 level. Nifty made a high of 21593 and fell sharply towards 21000 on Wednesday, follow up fall on Thursday saw Nifty touching sub 21000 level and recover sharply and settling the week comfortably above 21300. You may read it here (Weekly Market Update: Week Ending 15th December 2023 (amitbajare.blogspot.com).

For the coming week, we expect Nifty to remain volatile owing to monthly expiry of derivatives contracts. Moves on either side may be sharp but the bias remains positive. We expect Nifty to end the year on a High. Also next week being a truncated week may see higher volatility.

BankNifty on the other hand remained subdued with intraday volatility remaining high. It has closed marginally below its support on daily charts, but bias on BankNifty also remains positive. 

Indian markets are expected to remain bullish and surge ahead. Profitable times lie ahead for the investors.

Stay Invested!!!

“Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.” – By Paul Samuelson

P.S.: This communication is for educational purpose only and does not recommend buying or selling any stock or index. Trade at your own risk.

Week Ending 15th December 2023

Dear patrons; it has been a stupendous week for the markets. The Nifty scaled new highs everyday shattering record after record, So vicious has been the charge by the Bulls that Bears are nowhere to be found, paving way for an astonishing rise of around 500 points in a week.

The rally on the bourses was effected by a strong in flow of good news on economic front. Firstly the central bank, RBI held status quo in interest rates and revised the GDP growth upwards. We are likely at the peak of the interest rate cycle and the market expects rates to come down in near future, leading to even further rise in the GDP growth. CPI & IIP data was also released during the week. CPI, although above RBI's comfort level, is still manageable and likely to cool off with Kharif crop. IIP data was great booster for the market. At the peak of interest rates IIP has been keeping a fast pace upwards. In case interest rates do come down in near future it will lead to further rise in industrial production providing further impetus to rise in the equity markets.

Globally, the Federal Reserve in the US also kept rates unchanged and was dovish in its commentary for the future rate cycle. US markets also expect rates to come down in near future providing impetus to growth in the World's largest economy. If rates in the US do come down as expected, it should lead to more fund flows to emerging markets like India.

Let's have a look at what happened on the charts last week

Nifty, as is evident from the above figure is at an all time high and in no resistance zone. Every dip in the Nifty is being bought into. As we had stated in the last blog Nifty still remains "Buy-On-Dips". Nifty remains in a very strong up trend and is likely to inch forward. Support for Nifty is around 21000 and resistance around 21500-21600. Up trend in Nifty remains intact till the time it closes below 20500. 

BankNifty, which was the leader in the last run lagged behind in the first part of this up trend but more than made up for the laggardness in the last couple of weeks to post closing above 48000 level. BankNifty has also entered an uncharted territory and is in no resistance zone. Support for BankNifty is placed around 47100-47000. and it may face resistance around 48500-48600.

All in all first fortnight of December has been a dream come true rally for the Bulls and investors have become richer every passing day. We expect many such moves in coming years and we should see Nifty becoming a 6 digit index in a decade or so.

Till such time keep accumulating good quality stocks.

Happy Investing!!!

"Trend in the market remains unchanged until and unless clear reversal signals occur" ~ Charles Dow (Dow Theory)

P.S.: This communication is for educational purpose only and does not recommend buying or selling any stock or index. Trade at your own risk.

Week Ending 8th December 2023

Dear patrons, as I write this edition of weekly blog, we are sitting pretty at an all time high on almost all indices. The Indian markets have shown tremendous strength over the last month or so. Benchmark index Nifty posted consistent gains on all but one trading session over the last week and added almost 3.5%.

Election results in 5 states were in favor of the ruling BJP, which was welcomed by the bulls. These elections were treated as a precursor to the general elections next year, and the ruling party getting a thumping majority is good sign for the future.

On the economic front, RBI's Monetary Policy Committee announced its bimonthly policy, where in interest rates have been kept unchanged and the governor was pretty dovish in his stance for the future. Indian economy has been resilient over the tumultuous period of pandemic, wars and slow-downs. The RBI has been very proactive in its approach and navigated very smartly through this period. We believe we are at the peak of interest rate cycle and should soon see rates lowering. Lower rates should provide further impetus to an already buzzing economy, propelling it towards newer highs in coming years. Fall in crude oil prices also augurs well for the Indian economy as it eases a lot of import bill.

Global markets have been quiet for some time now. Indian markets are outperforming peers by a fair margin. We believe that this outperformance will continue in time to come and a massive realignment will take place in global order.

Let us have a look at what happened last week and try to figure out what is in store for next week.

It was one way traffic in the markets last week. Bulls made a mess of bears and catapulted the benchmark Nifty towards 21000 from around 20000 in just 5 sessions. We are in an uncharted territory on the Nifty and some resistance may be faced around 21000. Market remains "Buy-On-Dips". It may be a prudent idea to book some profit and stay on cash for the time being and wait for some corrective action to reenter. 

BankNifty, which was lagging till last week was a front runner last week, outperforming the Nifty and making a new all-time high. BankNifty is also in an uncharted territory and may rise some more. 46000 appears to be support. BankNifty also remains "Buy-On-Dips".

Interesting time lie ahead for the Indian investors, as the indices climb newer highs. Traders have to be judicious in selection of stocks. We are cautiously optimistic on the market. Future looks bright.

Stay Invested!!!

“The most important quality for an investor is temperament, not intellect.” ~ Warren Buffett

P.S.: This communication is for educational purpose only and does not recommend buying or selling any stock or index. Trade at your own risk.

Week Ending 1st December 2023

Dear patrons, the markets were in a buoyant mood over the last week, ending a streak of lull of a week or so. Nifty scaled a new All Time High as predicted in our previous blog (you may read it here Weekly Market Update: Week Ending 24th November 2023 (amitbajare.blogspot.com)). As we had predicted markets moved up swiftly clocking gains of over 2% in a truncated week.

Global cues were robust over the previous weekend. Domestically very good set of GDP Growth numbers added oil to the already red-hot markets. India's GDP grew by 7.6% in Q2FY24, making it the fastest growing big economy in the world. It was a positive surprise for the markets and the bulls took full advantage of this good news propelling the markets to new ATH. India is estimated to grow at 6.5% for FY24.

Although Nifty achieved an ATH, the BankNifty remained some distance away from its ATH. The markets are expectantly waiting for election results. Favorable outcome in the elections may lead the market to newer highs and any divergence in results may lead to a small correction.

Let us have a look at the charts and try to figure out what lies in store for next week.

Nifty made a new ATH last and is in an uncharted zone, RSI, however is showing a divergence, which, points towards a probable corrective move. In case Nifty moves down it should find support in 20000-19800 range. On the upside, we may see some more traction and profit taking may emerge after election result euphoria dies down. 

BankNifty has been underperforming compared to Nifty. It has remained subdued in the last month, managing to gain some ground only in the last week. 44000 happens to be a strong support for BankNifty. Sustaining below 44000 BankNifty may drift towards 43500.

All in all traders should be cash ready and look for opportunities to buy in case of any dips in the markets. Till the time Nifty is above 19400 market remains Buy-On-Dips.

Happy Investing!!!

"The biggest risk of all is not taking one." ~ Mellody Hobson

P.S.: This communication is for educational purpose only and does not recommend buying or selling any stock or index. Trade at your own risk.

Week Ending 24th November 2023

Dear patrons, the week gone by was lackluster on the indices with focus shifting to stock specific action. The benchmark index participants were in a consolidation phase and midcaps along with small caps were in the limelight with both indices making life time highs.

Globally also it was a lack luster week, with almost all markets trading in a range. On news front as well, there was no event which made headlines. Something is surely brewing in the equity markets across the globe and by all means it looks like it is going to be good for investors.

Foreign Institutional Investors had a muted participation last week barring last trading session where they turned aggressive buyers. Domestic Institutions have been buyers through the last week. Coming week being truncated and expiry week as well, should see volatility spiking up and swift movement in both directions can be seen.

Let us look at what exactly the indices did last week and try to anticipate what is in store for the next week.

We had stated last week that Nifty has resistance around 19850-19900 levels and support around 19300. The Nifty made a low of 19380 and a high of 19875. For the coming week Nifty has support around 19600-19700 failing which, it may drift towards 19400. Nifty may surprise on the upside though, owing to expiry week. Short covering along with fresh buying may lead Nifty towards new highs.

BankNifty, which was sedate for the first half of the week managed to hold its head above the crucial 43400 mark and looks set for an up move with resistance around 44000. Closing above 44000 should open doors for further up move towards 45000. BankNifty appears to be a strong candidate for short covering next week on account of monthly expiry.

Traders need to be nimble footed as moves could be swift on either side. Mantra remains the same for investors though, keep accumulating good quality stocks.

Stay Invested!!!

“The intelligent investor is a realist who sells to optimists and buys from pessimists.”~ Benjamin Graham

P.S.: This communication is for educational purpose only and does not recommend buying or selling any stock or index. Trade at your own risk.

Week Ending 17th November 2023

Dear patrons, the Indian markets are on a role for last few weeks holding ground and being resilient to the financial as well as geopolitical situation around the globe. In the week gone by indices on the NSE and BSE posted decent gains and ended UP almost 1.5%.

Rise in the markets can mainly be attributed to the fall in inflation both in India as well as the US. Drop in inflation in the US was a substantial 0.5%, highest, for a long time. India CPI also came down from 5.2% to 4.87%. Easing inflation augurs well for the equity market as the pressure on interest rates will also ease and we may see higher liquidity in the system prompting investors to switch to risk ON mode. 

Back home, we are consistently witnessing robust growth in the economy, the results season being a testimony to rise and rise of the Indian economy. Rise in economy is the booster to the propulsion of the equity markets towards newer highs.

Let us now look at what transpired in the last week and try to figure out what lies in store next week.

As we can see, Nifty rose in the last week owing to good inflation data. Nifty has strong support in the 19350-19400 zone and resistance in 19850-19900 zone. Closing above the resistance zone should propel the Nifty to newer highs in near future. In case of any adverse event a close below 19300 may lead the Nifty towards 18900, which should act as a very strong support and we are unlikely to witness levels below 18900 in near future.

BankNifty on the other hand was hit by the new RBI regulations on personal loans, where the risk weightage was increased from 100% to 125%. The move by the RBI is likely to impact the earnings of many Banks as well as NBFCs adversely. The steps taken by RBI, although look to be negative for NBFCs particularly, should lead to cleaning up of the personal finance business and reducing risk to the overall economy. BankNifty has strong support around 43400-43500. Close below 43400 opens doors for further downward movement. 44000 should act as resistance and a close above 44000 should lead the BankNifty towards 45000 and beyond.

In the meanwhile keep accumulating good stocks and keep booking profits as well. Ample opportunities are available in the markets to make good profits.

"Far more money has been lost by investors trying to anticipate corrections, than lost in the corrections themselves.” ~ Peter Lynch

P.S.: This communication is for educational purpose only and does not recommend buying or selling any stock or index. Trade at your own risk.

Adani, Hindenburg and India

We are all aware about the report published by professional short selling firm Hindenburg against Adani group. The said report has resulted in fall of share prices by more than 80% from recent highs. All Adani group shares have borne the brunt of this report. What this fall in share price has done, is that it has managed to dethrone Gautam Adani, Chairperson of the Adani group from top ten billionaires in the world from the position of 2nd rank. Is this a conspiracy against India or just another strategy in the market?

Well, from the looks of it, it may look like a strategy but actually it is deep hatred ingrained in the western society for a brown man getting into an elite club, of which, only white skinned had the monopoly. Adani was not only a member of the elite club, but he threatened to dethrone the number one. 

Secondly, India is taking huge strides in becoming a developed nation from a so called third world country. This growth is not very well digested by the developed world. Huge amount of Foreign Direct Investments are on their way to India. India is likely to become the world’s manufacturing hub, replacing China. India has already taken over the UK as the 5th largest economy and is likely to be among top 3 in the next decade. This growth has been largely driven by Indian businesses like Adani group. Once one breaks the back of growth in businesses, the economy is automatically affected resulting in job losses, lower income and overall stagnation or downward movement of the GDP.

No doubt Adani group has debt, so do all the businesses. No business or country can effect growth without debt. If we look at the debt by countries in comparison to the GDP, we find that India is ranked 17th in overall debt with close to 20% debt to GDP ratio, whereas the US has close to 120% debt to GDP ratio while Singapore tops debt to GDP ratio among top 20 countries with a whopping 470% debt to GDP. When we look at individual companies we find that although Adani has debt, it is not the biggest debt company in India. Also, of the total debt owed by Adani around 25% comes from Indian banks and rest from overseas bonds and loans from foreign entities. Adani group is estimated to have a debt of around $ 30 billion, which is nothing compared to the top debt owner TOYOTA having close to $ 186 billion debt. Adani doesn’t feature in top 30 in the list. As far as Indian companies are concerned NTPC alone has almost the same debt as the entire Adani group. To add to that Adani Enterprises, the flagship company of the Adani group has been consistently clocking profits for last four quarters. YoY company went from loss to profit in Q3FY23.

Why single out Adani then? The answer lies in the growth of the company outside India. All of this started the day, the company acquired coal mines in Australia. And to add to it, the group acquired various ports and mines across the world from Sri Lanka to Israel. The question of whether the group has government backing or not does not arise here. If government backs Adani group, it is the duty of the government of the day to back any Indian business in growth and going global. No one has ever uttered a word when China backed its companies with low interest loans, subsidies and all other support and flooded the world with cheap Chinese products. Why should anyone cry foul if any Indian company is backed by its government.

Let us come to the old, opinionated, rich and dangerous George Soros. Soros is a degenerated rich man finding solace in someone else’s misery. He is that contemptuous person who made his fortune by selling his own ilk to the butchers of the Nazi forces. This wily old degenerate has the audacity to lecture us on democracy, which is thriving and prospering in India. We know what democracy is and how it works. A third rate scum like Soros has no business lecturing us on it. His failed attempts for a regime change in India has rattled the wily bastard. This is the reason he has chosen Adani shoulder to fire against India and Indian democracy.

Week Ending 21st July 2023

Dear patrons, welcome to yet another edition of our weekly blog. The Indian markets have been on a stellar up move for last couple of months, moving from strength to strength. Although world over stock markets have remained more or less sticky, the Indian bourses have managed to create all time high closing on multiple days in July.

The rally in the markets has been pushed by the FIIs, who have been on a buying spree for last couple of months. Domestically the money flow in the markets has been consistent. Relatively good numbers so far for Q1FY24 have added to the frenzy.

Fear of a recession in the US has eased considerably with falling inflation and decent demand. The Federal Reserve may no longer fill the necessity to raise interest rates in a hurry, Halting the upward movement in the interest rates should prove to be a boon for the markets,

The result season has begun with IT big wigs announcing decent set of numbers. Infosys however has reduced its guidance by more than half, resulting in sharp cut in stock price as well as indices. Nifty lost its 6 days winning streak on the last trading day of the week owing to weak guidance by Infy.

What is in store for the next week? Let's try to figure out

As the chart shows Nifty is moving from strength to strength. It is likely to have completed its 5th up wave. There is divergence in the RSI on weekly charts, which suggests a corrective move or retracement. The charts are yet to confirm the retracement though. The coming week being monthly expiry week may see whipsaw action and increased volatility. Nifty may witness wild moves on either side.

BankNifty, after remaining sluggish for the first half of the month, has moved up sharply last week, It also looks pretty stretched and showing signs of fatigue. There is divergence in RSI on daily charts of BankNifty and similar to Nifty the confirmation for retracement is pending. Being expiry week volatility in BankNifty will also be high.

Traders may look to buy dips. Both Nifty and BankNifty remain "Buy On Dip". Remain vigilant at higher levels in the indices.

Stay Invested!!!

“Emotional investment is a sure way to make loss in stock markets." ~ Rakesh Jhunjhunwala

P.S.: This communication is for educational purpose only and does not recommend buying or selling any stock or index. Trade at your own risk.

Week Ending 26th May 2023

Dear patrons, the May series for derivatives contract ended with a gain of around 3%. Looking at the scenario around the globe the Indian markets have given good returns last month. Nifty managed to sustain above the all important level of 18000 for the entire May series. 

The US markets were volatile losing and gaining on successive days. The US economy is suffering with high interest rates and low consumption leading to recessionary fear. US debt to GDP ratio is very high and for the first time in our memory the rating agencies have placed the US in negative watchlist. The US is looking at a possible default if timely raise in the debt ceiling is not approved.

If at all the US defaults it will have huge bearing on the global economy and the stock markets. In the event of default we will definitely head for a recession around the globe. India will not be able to remain unaffected by such recession, although we believe the impact on India will be far lesser compared to the rest of the world, due to India's high domestic consumption.

Whether the uptrend in Nifty continue or will we see some corrective moves in the markets? Let's try and figure out.

We can see on daily chart Nifty has given a strong closing Friday. Nifty is likely to have completed its 3rd wave up and may be ready for a corrective downward movement. In the event of a fall in the markets Nifty has first support around 18200 breaching which it may further slide towards 17800.

Looking at BankNifty, it also looks to have completed its 3rd wave up and may be ready to enter a corrective phase. In the event of fall in BankNifty, it has first support around 43400 failing to protect it may lead BankNifty further down towards 42000.

Traders need to be nimble footed and adhere to strict stop loss. Investors can look for investment opportunities in quality stocks in falling markets.

Stay Invested!!!

Happy Investing!!!

“You cannot make profits in the stock market unless you have the ability to bear losses.”  ~ Rakesh Jhunjhunwala

P.S.: This communication is for educational purpose only and does not recommend buying or selling any stock or index. Trade at your own risk.

Week Ending 21st April 2023

Dear patrons, as predicted in the previous blog the benchmark indices did a "U" turn and lost more than 200 points for a weekly closing around 17600. We had mentioned in the previous blog that the Nifty is likely to slide towards recent lows. The target remains far from achieved though. You may read about our analysis here Weekly Market Update: Week Ending 13th April 2023 (amitbajare.blogspot.com)

On the global front, markets around the globe remained sideways. Crude oil moved down on economic growth worries. The downward movement in crude is good news for India, as a major chunk of India's import bill is on account of oil, the flip side is, falling crude oil is an indication of falling growth around the world, which in turn may affect India's growth. Although India remains fairly robust domestic consumption economy, recession around the western world may hamper our growth trajectory for some time.

Our markets for the time being should see stock specific action as we are in the midst of results season. So far the result season has been a mixed bag. IT giants have disappointed the investors and bore their brunt, losing heavily over the last week. Two major stocks on the indices announced results Saturday, namely, Reliance and ICICIBANK. It remains to be seen whether the markets like the numbers posted by these companies or not.

Benchmark index Nifty remained in consolidation mode after losing heavily at the start of the week. Coming week being expiry week for the derivatives, is likely to see volatile action and swings on both sides may be in the offing. 

Let's try to analyze move on the indices and see as to what lies in store for the coming week.

As we can see in the above image Nifty dropped heavily at the start of the week and then remained in consolidation mode for the remaining week. The Nifty looks ready for a fall towards 17500 and below in the coming week. Nifty closed just below its support level on Friday and next support is seen around 17500, failing to protect this level it may swiftly slide towards 17000. Nifty has again moved to "Sell on Rise" mode. 

Coming to BankNifty, we did mention that it looks stronger among the 2 indices. It managed to consistently close above the 42000 mark over the entire week. Immediate support for BankNifty seems to be around 41900 failing which 40800 should act as a major support.

Markets may see swing on either direction. Traders should be prepared to ride this roller coaster. Following levels should prove to be rewarding. Market should provide ample opportunity if you wait patiently for levels and adhere to strict trading framework. Do follow stop loss in any event. 

"We don't have to be smarter than the rest, we have to be more disciplined than the rest" ~ Warren Buffet

P.S.: This communication is for educational purpose only and does not recommend buying or selling any stock or index. Trade at your own risk.

Week Ending 13th April 2023

Dear patrons. the markets over the last week have shown good up move. As predicted in our previous blog the Nifty managed to move up beyond our expectation and scaled newer highs on a daily basis. We had suggested about this up move when Nifty was around 16900 levels and we have been accurate in our prediction.

Global markets remained positive over the last week. With the onset of results season focus now shifts to stock specific movement rather than the indices. Most of the stalwarts of the Nifty will be out with yearly results over next 15 days and the results will set the tone for the markets.

Two IT giants have set the ball rolling with results last week. Both TCS & Infosys declared results last week and both were not up to the expectations of the street. Infosys in particular posted disappointing set of numbers. The markets may not like them and the stock may receive some pounding on the bourses. TCS was not a huge disappointment, however it wasn't a great set of numbers. We may witness overall IT sector being punished on account of poor performance by these stalwarts. The IT index closed below its important support level and is likely to move towards its recent lows.

Coming to Nifty, last week the index remained consistently in the green and managed to close up by over a percent and a half. What lies in store for the coming week? Let's try and analyze.

On the daily time frame Nifty has likely completed wave 4 up and is likely to commence 5th wave down. Technically if this wave pattern holds true Nifty is likely to move down towards recent low and go some more down.

Banknifty on the other hand has made smart gains and is in its upward wave pattern. Wave 3 of this upward pattern looks to have been completed and Banknifty is likely to commence its 4th corrective downward wave. 40800 should act as very strong support for Banknifty.

Traders are advised to be cautious in taking news driven trades in the result season. Any event regarding result may lead to volatile moves on stocks. Adhere to strict stop loss.

"How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case." — Robert G. Allen

P.S.: This communication is for educational purpose only and does not recommend buying or selling any stock or index. Trade at your own risk.

WEEK ENDING 06TH APRIL 2023

Dear patrons, last week was a truncated trading week with holidays galore, however the markets were in buoyant mood and saw sharp rally to end the week gaining over 1%. As was mentioned in the last blog Nifty moved past first resistance 17400 and closed just below 17600. You may read about it here Weekly Market Update: Week Ending 31st March 2023 (amitbajare.blogspot.com)

The RBI announced its monetary policy last week. In a surprising move the RBI maintained a status quo in the rates, even though inflation remained at uncomfortable levels. The central bank also suggested that it remains accommodative in its stance, paving way for the markets to move upwards. The RBI's move is a bold statement highlighting the belief in the economic stability in the country boosted by the domestic consumer. Globally banks are raising rates due to high inflation. In India, however, the central bank is hardly thinking about inflation and focusing on growth. This boldness should yield results in the coming quarters, and we should see rise in economic activity and a move towards $5 Tn GDP in near future.

India's exports crossed $ 750 Bn mark for the first time. The Government also announced new Foreign Trade Policy last week and impetus is given to exports, aiming for $ 2 Tn by 2030. The target set by the trade policy looks achievable especially with increased manufacturing activity along with rise of India as an arms supplier. 

Let us now try and analyze what's in store for the coming week, which again is truncated.

As can be clearly seen Nifty has closed just below a major resistance around 17620. For the next week, the Nifty should face stiff resistance around 17600 and change course of direction. 

On the weekly charts also, Nifty has resistance around the same levels i.e. 17600. The up move in Nifty is likely to be terminated around these levels. A close above 17630 may provide strength to the bulls and open up 17750 on the index.

The Bank Nifty on the other hand has managed to close above all-important resistance of 40800. A break below 40800 may open up move towards 40100 on the Bank Nifty. 41400-41500 remains a profit booking zone for the time being. Bank Nifty is likely to be range bound with a negative bias. 

As always traders should follow levels and adhere to strict risk management rules. Result season is approaching, which may lead to increased volatility and stock specific action. There should be ample opportunity on both sides.

“Conviction is not an happening, but once you go through the process & be convinced, do not compromise it. The rest will also come to your turf eventually.” ~ Sandeep Sahajpal

P.S.: This communication is for educational purpose only and does not recommend buying or selling any stock or index. Trade at your own risk.

Week Ending 31st March 2023

Dear patrons, financial year 2023 ended on a bright note for the markets. The benchmark indices rose sharply by over 1.5% to close in the green for the month of March. The expiry for the month of March also saw decent up move in the indices on the back of short covering. Nifty managed to end the series with a psychologically important closing above 17000.

The week gone by was slow on the news front. As we mentioned in our previous blog, there was "no news" from the US and it remained "good news" for the markets globally. Almost every major market in the world gained significantly in the last week of March.

Domestically India's forex reserves saw a growth of around $ 6 bn to reach a total of $ 578.78 bn. The forex reserve are showing a rising trend for last couple of weeks and should continue to be positive going forward as India increases its clout in global economy through trade in the Rupee. Also the monthly collection of GST was in excess of Rs. 1.60 lakh crore, second highest since the introduction of GST. India's current account deficit also narrowed to about 2.2% of the GDP, which is likely to narrow further with the launch of new trade policy, providing impetus to exports.

Let's now try to figure out what is in store for us over the next week as far as the markets are concerned. 

As we can see, Nifty managed to take support around 16900 and moved upwards towards 17400. We had clearly mentioned in the last blog about these levels. You can read about it here Weekly Market Update: Week Ending 24th March 2023

We expect the indices to move northwards a bit more. Nifty faces hurdle around 17600 and may not be able to cross it in a hurry. Trend remains "sell on rise". Traders need to be cautious and should not get swayed by the up move. Any up move towards 17600 should be used to book profits and be ready with cash to be deployed in fall.

Bank Nifty also gained impressively last week. Bank Nifty consistently held its head above 39000 paving way for an up move, as we have been suggesting in our blogs. 40800 should act as immediate resistance for Bank Nifty, above which, a move towards 41400 may be visible.

All in all a truncated week should present opportunities on both sides. Traders need to be nimble footed. One should follow levels and adhere to stop losses strictly.

"Anticipate trend and benefit from it. Traders should go against human nature." ~ Rakesh Jhunjhunwala

Stay Invested!!!

Happy Investing!!!

P.S.: This communication is for educational purpose only and does not recommend buying or selling any stock or index. Trade at your own risk.

Week Ending 24th March 2023

Dear patrons, last week was a rollercoaster ride for the markets. The benchmark indices traded in the positive territory till mid-week but lost all ground on the weekly expiry day and the last trading day, markets opened flat and remained negative throughout the session to close down by around 1%.

As we had mentioned in the previous blog, 17200 acted as hurdle on the Nifty. The Nifty lost ground swiftly as is always the case with fall in the markets. Within a couple of sessions markets lost 2% ending the week below the all-important level of 17000.

The US Federal Reserve increased the interest rate by 25 bps during the week paving way for weak US markets. Contrasting statements by the US secretory of treasury, on bank bailout created confusion in the markets. As far as the US is concerned, we can say "no news is good news". Over the last week one of the biggest banks in the world Credit Suisse also announced concerns but was saved by timely take over by UBS. Failure of another bank is no good news for the global economy and concerns of recession are fast becoming a reality.

Moving back home, we have been consistently mentioning that Nifty is in "Sell on Rise" mode and have been correct in our assessment so far. Over the last month, from our mentioned level of resistance i.e. 17800 Nifty has lost close to 1000 points. The pain may persist for some more time. Let's see what is store for the coming week.

We can see Nifty falling on consecutive sessions and breaching the psychological level of 17000. On the daily timeframe Nifty remains in no support zone, meaning it may further slide down swiftly. The only solace one can find on daily charts is that in all probability Nifty has completed its 3rd wave down and may move upwards from 16800-16900 levels.

On the weekly charts also Nifty looks like it has completed its 3rd wave down and may move up towards 17400. The 17400-17600 zone may act as supply zone and profit booking may be seen around these levels.

BankNifty has been following levels mentioned in previous blogs. 39000 as mentioned previously has acted as strong support and BankNifty has consistently managed to close above this level. Resistance for BankNifty appears to be around 40000-40200 levels. Managing to close above 40200 opens the move towards 40800 on the BankNifty.

The markets still remain "Sell On Rise". Traders need to be cautious and adhere to strict stop losses. The coming week being the expiry week and a truncated one, may see jump in volatility and wild moves either side may be visible in the markets. We do believe that we are yet to see the bottom of this corrective phase.

"Srock market is above individuals. The market is rational. An individual can never be smarter than the market" ~ Rakesh Jhunjhunwala

P.S.: This communication is for educational purpose only and does not recommend buying or selling any stock or index. Trade at your own risk.

Week Ending 17th March 2023

Dear patrons, welcome to yet another edition of weekly update on the stock markets. The markets lost significant ground over the past week. We have been suggesting a fall in the markets since the start of the month and our strategy of sell on rise is proving to be helpful in handling the volatile markets.

As we had mentioned in the last blog the markets have shown weakness and lost ground swiftly. On the last trading day however, the indices rose towards the close and managed close above 17000 on the Nifty. This rise in the indices is on the back of short covering and not long build up. 

Indian WPI (Wholesale Price Index) and CPI (Consumer Price Index) data was released last week. The CPI eased just a tad bit from 6.52 to 6.44 and the WPI saw healthy fall from 4.73 to 3.85, The WPI is at 25 months low. The fall in the WPI suggests that the RBI's decision of raising interest rates is yielding fruits and providing comfort to the economy. Softening of the inflation may also lead to halt in interest rate rise and the RBI may hold status quo.

The main driver behind the fall last week was the failure of banks in the USA. One of the biggest banks in the US, the Sillicon Valley Bank, has collapsed and is taken over by the regulators, sending shockwaves through the US markets. The fall of the Sillicon Valley Bank was followed by fall of two more banks, showing all is not well in the World's largest economy. The interest rate hikes have failed to contain the inflation, on the contrary it has sucked out liquidity leading to failure of banks. Some more disasters might be in the waiting in US. You can read more about the Sillicon Valley Bank failure here Weekly Market Update: SVB, 2007 REDUX OR AN ABERRATION? (amitbajare.blogspot.com)

Coming back to our markets the Nifty is interestingly positioned around 17100 levels closing down around 2% on weekly basis. What lies ahead for Nifty? Let's try to find out

As we can see in the above chart Nifty tried to regain lost ground and closed in the green on Friday. 17200 should act as first hurdle for Nifty sustaining above which, may take Nifty towards 17400.

The BankNifty also closed in the green on Friday and managed to close above the all important levels of 39000, we had mentioned in the last blog post. 39800 should act as the first barrier for the BankNifty above which, it may move towards 40400.

Markets still remain "Sell On Rise". It would be prudent to book profits in every rise and sit on cash. Even booking small losses and keeping cash ready for deployment in case of fall towards 16600 should be the most fruitful strategy in current market conditions. Markets will provide ample opportunity and time for deployment of funds. One should wait for levels to arrive and take action once levels are achieved. Currently the scene does not look very optimistic to be bullish and blind rush in buying may lead to disaster.

In any case traders should be cautious and adhere to strict stop losses to avoid the agony of losing hard earned money.

"Money is the most egalitarian force in the World, it confers it's powers to whoever holds it" ~ Anonymous  

P.S.: This communication is for educational purpose only and does not recommend buying or selling any stock or index. Trade at your own risk.

SVB, 2007 REDUX OR AN ABERRATION?

In a very shocking development in the USA one of the biggest banks, namely the Silicon Valley Bank has collapsed. The US regulators have shut the bank down Friday. The bank was involved in funding a lot of start ups in the California region and had funded many other start ups through funding to VCs. This collapse is reminiscent to what happened in 2007-2008 in the sub prime lending era. What led to this collapse? 

As we all know US is a business-friendly country. Funding is available at very low interest rates which helps businesses grow rapidly and exponentially. Many a times risk is overlooked in pursuit of rapid growth and becomes the undoing for the entire economy.

During the Covid period when entire business activity across the world came to a standstill, many countries took to fiscal stimulus to improve industrial activity as well as provide impetus to growth. The US also provided a fiscal stimulus albeit by providing cash assistance to its citizens. In pursuing growth, the US resorted to printing money and distributing it to all and sundry. The easy availability of money meant people had more expendable surplus, which, went to markets as well as banks, setting investment products like equities, precious metals et all on fire.

Silicon Valley Bank also had big influx of money in the form of deposits. The bank chose to invest in relatively safer bet, that is bonds. The bank estimated that bond yields in the longer run would remain stagnant and this is where the problem started. They say "never put all eggs in one basket", the SVB however. invested around 80% of its deposits in long term bonds expecting yields to remain steady. The yields could have been steady but the Russia-Ukrain war threw the world in a spiral of rising inflation. The US along with the entire west sanctioned Russia endangering their own economies more than Russia. Inflation rose to unprecedented levels in the US prompting the Fed to act tough on the interest rate side. The fastest and easiest way to tackle inflation was undertaken and we saw a series of interest rate hikes. This hike had an impact on the equity markets as well as the bond markets. The equity markets in the US remained range bound in the series of interest rate hikes and bond markets remained volatile while yields for long term bonds went up. As interest rates rose liquidity was sucked out of the system. Banking system also bore the brunt of this liquidity shortage along with start up ecosystem. The Silicon Valley Bank had to cater to rising demand by the depositors, which it tried to cater to by selling its long term investment in bonds. The bond yield, however had shot up due to higher interest rates resulting in losses when the bank sold its portfolio. The bank lost over $1 bn in this transaction and depositors were requested not to withdraw their deposits. The bank is now well and truly under control of the regulator and there may be some more bad news in this context. The financial world needs to brace itself for aftershocks. We may indeed be on the brink of a recession and the Silicon Valley Bank might be the first casualty of the impending doom.

Week Ending 10th March 2023

Dear patrons, the preceding week was a truncated week on account of Holi, the festival of colors. However, markets saw only one color and that was red. As was indicated in the previous blog Nifty faced stiff resistance around 17800 and retreated towards 17400. The path forward for the month looks a bit tricky and it looks like a herculean task for the Nifty to cross 17800.

The main reason for the fall in Indian markets was the economic unrest around the western world. US Fed chief sees more tightening in future with sharper rate hikes. The US economy is grappling with declines in consumer demand and rising inflation. Rise in inflation is being tackled by increase in interest rates which in turn slows economic growth. Since the US is the biggest consumer in the world any slow down there hampers the global economy. 

India on the other hand is doing exceedingly well. IIP data was released Friday and it saw a jump by 5.2% YoY. This augurs well for the Indian economy and in turn the Indian markets. Over the period of next decade or so India is slated to be among the top 3 economies of the world with a GDP exceeding $10 tn. The current scenario, however, is a dampener in the sentiment and may take time to straighten things out.

Let's now shift focus to the Indian indices. Nifty had a fantastic closing last Friday and managed to add some more gains Monday. Midweek session onwards there was rise in volatility and we witnessed selling across the market breadth. Nifty ended the week around 17400 gaining half a percent or so over the week.

As we can see Nifty could not manage to cross its 100 EMA around 17800 and took a sharp U turn. Nifty is currently trading in a zone where we can't see an immediate support on daily charts. The picture becomes a bit grim if we look at the monthly charts below.

On the monthly charts, Nifty has completed its 3rd wave up and is likely to commence its 4th wave down. The first target for Nifty in the event of fall comes around 16600 and further selling may take it down to 15600-15500 band. The markets are looking jittery and may lose ground swiftly. 

Coming to BankNifty, the situation looks dicey for BankNifty. It failed to sustain above 41500 and saw sharp down move. 

BankNifty has completed its 4th up wave and is poised to move down. BankNifty may move towards 39000 and failing to take support around these levels it may slide towards 37500-37200 range.

Falls in the markets are always swift, traders need to be cautious and nimble footed. As long as Nifty remains below 17800 mark traders should follow sell on rise strategy. 

In the meanwhile, as always keep accumulating good quality stocks in every dip. Staying invested is rewarding over long period of time.

"Courage taught me no matter how bad a crisis gets ... any sound investment will eventually pay off." — Carlos Slim Helu

P.S.: This communication is for educational purpose only and does not recommend buying or selling any stock or index. Trade at your own risk.