Week Ending September 27th 2024

Dear patrons; it has been a bull ride for the markets over the last few weeks and it is only gaining strength with passing time. Benchmark indices were on a roll for most of the week, clocking new lifetime high levels for most of the week.

In a slow news week bulls were at their ferocious best taking Nifty beyond 26000 mostly on the back of short covering owing to September series derivatives expiry. Surge in markets can also be attributed to incessant flow of money from domestic investors. Liquidity is no problem for the Indian markets as global bankers are in the process of reducing interest rates, thereby infusing a lot of liquidity in the financial system.

Global markets were also pretty buoyant and made new lifetime highs all over. Reduction in interest rates have sparked new optimism for growth across the globe resulting in strong bull runs.

Domestically, everything looks calm and optimistic on the economic front. As the festive season sets on there should be more spending by consumers leading to record tax collection for the government and record sells for consumer durables, FMCG and two-wheeler makers. Global expenditure on IT should also increase with reducing interest rates.

Let us take a look at what happened on technical front on indices and try to figure out what lies in store.

As stated in the previous blog Nifty staged a superb rally gaining more than 1.5% over the week. Nothing is amiss on charts as far as the uptrend is concerned. Markets may consolidate in the coming weeks with range bound moves within a small band. It has support around 25900 and resistance around 26400-26500, Almost all parameters on the charts are indicating some more upside.

After a bit of consolidation BankNifty also surged over last couple of weeks to post another lifetime high. It witnessed some profit booking on Friday. Stage looks set for BankNifty for yet another lifetime high. PSU banks are looking promising for the coming weeks.

In a truncated week market may behave erratically and with higher volatility. Traders should adhere to strict stop losses. Booking small profits and reentering the trade may remain flavor of the week.

Investors should look to accumulated good quality stocks and stay invested.

You never know what kind of setup market will present to you, your objective should be to find opportunity where risk reward ratio is best. ~ Jaymin Shah

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 September 13th 2024

Dear patrons, markets staged a superb comeback after a sharp and swift down move ending the week on a high. Indian markets have made it a habit of bouncing back with a greater ferocity after every fall. The latest bounce may be attributed to short covering on account of Nifty weekly expiry.

We did anticipate this up move in our last blog, where we had mentioned, Nifty moving to newer highs once it moves past 25200, and lo and behold it did zoom past 25400 within an hour of going past 25200. You may read it here ((Weekly Market Update: Week Ending 06th September 2024 (amitbajare.blogspot.com))

It was a slow news week for the markets. On the penultimate day of the week the European Central Bank cut interest rates by 25 bps to 3.50%. We had also predicted that all global bankers would start cutting rates ones there is a cut by the Federal Reserve of the US. The EU has gone one step ahead and cut rates as soon as a clear indication of rate cuts in the US came to the fore. Economic growth across the globe has dwindled across sectors and it becomes imperative for bankers worldwide to initiate action on interest rate front. 

Domestically for the second time in succession the CPI (Consumer Price Index) stayed below 4% to 3.65%, second best in almost 5 years. The level of CPI is comfortably below RBI's 4% mark. The IIP (Index of Industrial Production) also grew slightly to 4.8% against 4.7% earlier. The numbers are a testimony to India's robust growth despite challenges across the globe. We believe the impending rate cuts should bolster the economic activity in India and provide further impetus to growth. Influx of liquidity owing to rate cuts should reflect in higher allocation to risky assets like stocks resulting in further strengthening of an already bullish market.

Let's now take a look at technicals and try to figure out what lies in store for the coming week.

Nifty has made a new lifetime high last week. We are comfortably placed on most parameters for further up move on Nifty for the coming week. Support for Nifty lies around 25100-25200 range. As long as Nifty remains above 24900, it is a "Buy-On-Dips" market. Nifty is likely to move northwards for the first half of the week. Resistance is placed around 25500-25600 range. News flow after the Fed Interest Rate decision on 18th September will decide further move in the market. 

BankNifty also performed decently well last week. It will be the most impacted index after the Fed Rate cut. The picture looks good for some more up move in the coming week. Support for BankNifty lies around 51400-51200 range while resistance is placed around 52000-52300 range. A close above 52300 may propel BankNifty towards 53000 in a hurry.

Traders are advised to exercise caution with optimism. The old adage "Buy on rumor, sell on news" may well be kept at the back of the mind. Adhere to strict stop losses on either side. The moves may be wild and volatile. There may a spurt in volatility, particularly in banking stocks. Carrying leveraged position overnight may be risky in the coming week. There may be gap up or gap down opening in the market on multiple occasions.

Investors may look to accumulate certain good quality stocks in every dip.

Stay Invested!!!

“The goal of a successful trader is to make the best trades. Money is secondary.”~ Alexander Elder

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.

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Week Ending 06th September 2024

Dear patrons, wishing you all a very happy "Ganeshotsav". May Lord Ganesha's divine blessings bring you eternal happiness and peace, protect you from evil, and fulfill all your dreams and desires.

After a steady start to the week markets world over lost upward momentum and by the end of the week were fully gripped by the bears. Large sell offs took place across the globe, with the US markets leading the fall. Weak numbers over last weekend spooked investors in the US. Sell off in all asset classes happened due to fear of a looming recession in the world's biggest economy. After a big rally in short time markets needed a reason to correct and slight variation in jobs data provided that reason.

All the global markets fell from recent highs in varied quantum. Indian markets also fell sharply on last trading day of the week, after a recovery in mid - week session. Benchmark indices lost more than 1% to end the week on a somber note. We had cautioned in the last blog that aa correction is due and may arrive unexpected and be sharp and swift. (you may read it here Weekly Market Update: Week Ending August 30th 2024 (amitbajare.blogspot.com)).

We believe recessionary fear is unwarranted, particularly for a consumption driven economy like India. Also, this fear brings crude oil prices southwards, which is good news for Indian economy. Indian economy is moving in the right direction and out doing all its competitors by a comprehensive margin. The markets may feel a few jitters over next few days but are likely to recover faster than expected.

Let us now take a look at charts and try to figure out what lies in store for us in the coming week.

As we can see after a very good up move, markets have gone down sharply on Friday. Nifty has closed a tad below its support around 24900. We believe there may be some more pain in store at the start of the week for Nifty, with support around 24600-24500 range. Resistance for Nifty is placed around 25050-25100 levels. A close below 24500 may open doors for further downward movement towards 23800. If Nifty manages to close above 25100, immediate hurdle is placed around 25200, thereafter it is open sky for Nifty to move to new lifetime high levels.

BankNifty didn't do much over last couple of months. However, after a breakout at the start of the week BankNifty gave up gains and was firmly in bear grip. It may find support around 50200-50000 range. If BankNifty closes below 50000 more downward movement can't be ruled out for much lower levels.

We believe markets to trade with a negative bias for the coming week. Thereafter, as the big event of Fed rate cut comes closer markets should be able to stage a recovery. Markets remain "Buy-On-Dips". Select mid and small cap stocks can be accumulated for short as well as long term.

Keep accumulating good stocks with every dip and stay invested.

“A market downturn doesn’t bother us. It is an opportunity to increase our ownership of great companies with great management at good prices.” ~ 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 August 30th 2024

Dear patrons, the week gone by belonged entirely to the bulls. Benchmark indices ended the week on a lifetime high for Nifty and Sensex. Nifty gained close to 2% over the week and erased all the losses of the first half of the month. We had already stated about Nifty making new lifetime high in the last week of August (You may read it here Weekly Market Update: Week Ending August 23rd 2024 (amitbajare.blogspot.com)).

News flow over the last week was pretty slow amidst exuberance over the much expected rate cut by the US Federal Reserve. As they say "No news is good news" and it was very evident in the markets. Global markets were very buoyant last week with crude oil prices easing below $ 80 / barrel. Falling crude oil prices along with falling interest rates should infuse a big chunk of liquidity in the system and in turn in the markets.

Domestic GDP numbers were out last week. India's GDP grew by 6.7% against expectation of 6.9%. Fall in GDP has been attributed to fall in Government spending due to elections and model code of conduct. Rating agency Moody's has increased its projected growth of India's GDP to 7.2% for CY 2024. Falling crude oil prices should drive growth in India's GDP as oil accounts for the largest bill to the exchequer. Monsoon has been satisfactory in August and has exceeded its quota in many parts of the country. Agricultural growth seems to be on track with a bumper crop season. GST collection for August rose by 10% to 1.75 lakh crores, testimony to the rising economic activity including consumer spending in India.

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

Nifty moved slowly but steadily towards new lifetime highs as predicted in the last blog. As per the charts Nifty should find support in 25000-24900 range whereas resistance lies around 25500-25600 range. India Vix is comfortably placed for some more upside in the markets. RSI also suggests up move to continue for some more time.

A word of caution for traders. Nifty has closed in the green for consecutive 12 days. All good things come to end, so should this streak of positive closes on Nifty. We may witness a sharp and swift correction any time. Traders should be mindful of this and adhere to strict stop losses and book profits regularly.

Coming to BankNifty, after a subdued last week, it looks a bit fatigued with support around 51000-50900. Close below 50900 may trigger selling and BankNifty may towards 50000-50100 range, which should act as a strong support. On the other hand a close above 51500 may propel BankNifty towards 52400-52500 range.

Markets are "Buy-On-Dips", with every fall, big or small being bought into swiftly. Investors should look to accumulate good quality stocks in every dip.

“Value stocks are about as exciting as watching grass grow, but have you ever noticed just how much your grass grows in a week?”- Christopher Browne

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.