Week Ending 26th January 2024

Dear patrons; in a truncated week; the Indian markets were volatile on account of monthly expiry of January contracts. Benchmark indices lost decent ground last week amid global stability.

Globally news flow was quite slow and it reflected on the markets; which remained mostly range bound with a mildly positive bias. Indian markets saw spike in volatility. Coming week may see increased volatility owing to Union Budget (Vote of Accounts). This being the last budget before new government comes to power, may be a populist one and markets should react to it.

FIIs have been consistent sellers in the markets over the last few days, while domestic Institutions tried to support the markets with intermittent buying. We believe the trend of selling by FIIs should reverse in coming week and markets should move northwards.

Let's see what charts have in store for us for the coming week

As we can see in the above picture; Nifty was extremely volatile losing heavily one day, recovering the next day and losing again on the last day of the trading week. Nifty has closed substantially below its support around 21500. For the coming week immediate support for Nifty lies around 21200 and major support lies around 20500. It is likely to move in a broader range of 20500-21500. In case Nifty manages to close above 21500, we should see some more upside and conversely a close below 21200 may see further slide towards 20500.

BankNifty on the other hand has been punished severely over the last few weeks. Banking giant HDFC Bank bore the brunt of the bears owing to its result and post result commentary. Banking sector results have been a dampener for the markets, which were pretty buoyant after the IT sector results. We do, however, believe that worst is almost over for the banks, and they are ready for an up move. Support for BankNifty lies around 44500 while resistance lies around 45670-45750 range. 

Investors should look to accumulate good quality stocks in every dip. Traders need to remain vigilant and nimble footed. Event driven markets are always volatile, traders should adhere to strict stop losses and look to book profits regularly.

Happy Investing!!!

“Derivatives are financial weapons of mass destruction” ~ 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.