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.
