Week Ending January 10th 2025

Dear patrons, in the new year bears have been holding a stranglehold on the markets. Barring the first couple of sessions the new year has not been very auspicious for the bulls. In the week gone by markets lost quite a bit of ground again. Benchmark Nifty fell more than 1% while BankNifty fell by more than 4% to end the week in tatters.

Global markets remained subdued last week. The US markets took different directions wherein the Dow Jones moved southwards while Nasdaq moved northwards. Indian markets remained the worst performing for last week. Fall in Indian markets can be attributed to a large extent to the falling INR vs the USD. With interest rates lowering and USD strengthening, US has become a preferred destination for investors compared to a high interest economy like India. We have been consistently saying that interest rates in India are too high to sustain growth.

In all the chaos, there is some glimmer of hope. Quarterly results season has been kicked off spectacularly by TCS. The stock gained more than 5% on the back of good set of numbers and positive outlook for future from the management. Monthly IIP numbers have also moved up pretty sharply from 3.7% to 5.2% growth (MoM). We expect results season to be good this time around on account of festivities in the quarter and even better results are expected next quarter owing to World's biggest festival the "Maha Kumbha Mela". A congregation of close to 50 crore people are expected to happen at the "Kumbha", giving a major fillip to local as well as national economy.

Let's take a look at charts and try to figure out moves for the coming week.

As we can see Nifty moved sharply towards its recent lows last week. 23200 still remains strong support. In case 23200 is breached and Nifty closes below this level then there is every chance of the floodgates to open for big downward move towards 22500 and below. We are, however, very optimistic that fall in Nifty should be arrested next week and a rebound is likely to take place in second half of the week. "Uttarayan" for Sun and Nifty are likely to happen in tandem. Nifty has resistance around 23700-23800 and beyond this level, 24200 should act as stiff resistance.

BankNifty was badly hit last week losing more than 4% with major fall coming on the last day of the week. BankNifty is looking fragile on all time frames. It has strong support around 47300 while resistance is placed around 50000. 

Majority of sectoral indices have cracked last week. It should be prudent to hunt for opportunity in sectoral stocks. We have mentioned the sectors to look out for in the last blog. Traders should adhere to strict stop losses, as wild moves in stocks cannot be ruled out.

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.