Dear patrons, stock markets have been undergoing a traumatic phase over the last couple of years. It started with the Government of India increasing STT and Capital Gains Tax rates, then came the AI trade where every other sector bore the brunt of investments in AI companies and the final nail in the Coffeen was hit by the ongoing war in the Middle East. Although India has no interest in the war, the outcome of the fight namely soaring Crude prices have had an adverse impact on the markets.
Crude oil is hovering around the $100 mark for some time now. This rise puts enormous pressure on the Indian economy, as we depend almost entirely on imports. Higher Crude prices mean higher out flow of the Dollar increasing the USD against the INR. It is a spiral, which for the time being looks to be getting better on the sturdy financials posted by the Indian companies for last quarter.
In the last week, the US markets ended tad in the green WoW, gaining around 150 points. European indices along with Asian indices ended in the red for the week. Indian indices also closed the week losing close to 1% WoW (Week over Week).
Let us now look at the charts and try to figure out what lies in store for the coming week.
As can be witnessed on the charts Nifty closed positive on 3 days while closing in the red on 2 days. However, the quantum of rise was miniscule compared to the quantum of fall. We expect Nifty to remain negative given the expiry on Tuesday. The coming week is also going to be a truncated week. For the coming week 23300-23400 should act as stiff resistance. Move below 23000 may accelerate fall in Nifty taking it swiftly towards 22800 and below. Nifty should find support around 22800, below which, the flood gates may open for a move towards 22100.
Coming to BankNifty, it is showing better resilience to fall than the Nifty. 56000-56100 should act as resistance for BankNifty while 54400-54300 should act as support. If this support is taken out move towards 53200 can't be ruled out.
Traders are advised caution. Markets may remain volatile for the week owing to expiry of derivatives contracts. Action remains stock specific. Select stocks in the mid and small cap segment are outperforming the broader indices. One needs to be very selective in picking stocks. We believe there is ample scope for taking profitable trades in the short term through study.
Indian markets have been tasting the investors' patience for a long time now. The bears are looking a bit fatigued.
Our mantra as always remains to "STAY INVESTED". A studied approach to investments can be very rewarding.
Stay Invested!!!
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.
