Week Ending 23rd February 2024

Dear patrons, yet another week went by when the benchmark indices namely Nifty and Sensex have posted new All-Time-Highs. We had clearly mentioned in the last blog that Nifty is set to achieve newer highs and the Nifty managed to reach very close to 22300 levels. (you may read it here Weekly Market Update: Week Ending 16th February 2024 (amitbajare.blogspot.com).

Globally, almost all the markets were in a range lacking any specific direction. Minutes of the US Federal Reserve's January meeting were out last week. Overall there is optimism that policy undertaken by the Fed has managed to reduce the inflation. The minutes also suggest that the rate rise cycle is at its end and we may soon move towards rate reduction. However, the Fed is not in a hurry to cut interest rates.

Back home, we will soon be gripped by election fever and markets may take direction based on sentiment. Markets seem to be digesting sharp moves and appear to have exhausted. We may witness yet another week of indecisive moves on the indices.

Let's try to figure out what lies in store for us for the coming week.

We can clearly see that Nifty managed to hold its crucial support around 21900 and moved up sharply to make a new All-Time-High. Nifty also honored resistance for the resistance for the week around 22300 as stated in the previous blog. For the coming week support for Nifty is placed around 22000-22100. Strong support is visible around 21900. As long as Nifty stays above 21900, it remains buy-on-dips. Resistance for Nifty lies around 22400-22500.

BankNifty on the other hand has shown bigger moves on either side. Support for BankNifty is placed around 46500-46300 levels, meanwhile resistance lies around 47400-47500 range. BankNifty also looks a little fatigued and may remain in a range.

A word of caution for traders though, coming week being monthly expiry week, markets may move wildly even within a range. Traders need to be nimble footed and adhere to strict stop losses particularly in the derivatives segment.

Midcap index looks set for some upward move over the next week. Stock specific action should remain the flavor of the week and some stocks may outperform the broader index by some distance.

The mantra remains the same "keep accumulating good quality stocks" with every dip. 

"The philosophy of the rich and the poor is this: the rich invest their money and spend what is left. The poor spend their money and invest what is left.” Robert Kiyosaki

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.