Week Ending 22nd December 2023

Dear patrons, yet another stellar week has passed on the bourses, with the benchmark index posting new "All-Time-High". It has been a dominant display by the bulls for yet another week, barring an exception of the mid week session where, Nifty lost close to 2% witnessing year's biggest intraday fall. Bulls. however took charge in late hours during the penultimate session and continued to take markets higher.

There was a sharp fall on Wednesday, wherein Nifty touched an "All-Time-High" and slid quickly and sharply. A number of attributions were given for the fall. RBI's announcement that Indian inflation was above its expectation and may need some more time to come down might have spooked the markets, leading to a healthy fall. On the other hand IMF restoring faith in Indian economy and declaring India to be fastest growing large economy restored some faith and we saw markets recover on following days.

Globally, there is optimism that interest rates world over may stabilize and we may witness rates coming down sooner than later. This optimism lead to a rally in almost all the developed as well as emerging markets.

Another good news from the world of investment is that India Weightage increased from 7.7% to 16.6% in MSCI EM. This FPI money will get pumped in Nifty 100 stocks. Which can trigger a big rally in Large Cap & Larger Midcaps.

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

We can clearly see Nifty recovering from a fall in the above chart. We had suggested that Nifty has resistance around 21500-21600 level and strong support around 21000 level. Nifty made a high of 21593 and fell sharply towards 21000 on Wednesday, follow up fall on Thursday saw Nifty touching sub 21000 level and recover sharply and settling the week comfortably above 21300. You may read it here (Weekly Market Update: Week Ending 15th December 2023 (amitbajare.blogspot.com).

For the coming week, we expect Nifty to remain volatile owing to monthly expiry of derivatives contracts. Moves on either side may be sharp but the bias remains positive. We expect Nifty to end the year on a High. Also next week being a truncated week may see higher volatility.

BankNifty on the other hand remained subdued with intraday volatility remaining high. It has closed marginally below its support on daily charts, but bias on BankNifty also remains positive. 

Indian markets are expected to remain bullish and surge ahead. Profitable times lie ahead for the investors.

Stay Invested!!!

“Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.” – By Paul Samuelson

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 15th December 2023

Dear patrons; it has been a stupendous week for the markets. The Nifty scaled new highs everyday shattering record after record, So vicious has been the charge by the Bulls that Bears are nowhere to be found, paving way for an astonishing rise of around 500 points in a week.

The rally on the bourses was effected by a strong in flow of good news on economic front. Firstly the central bank, RBI held status quo in interest rates and revised the GDP growth upwards. We are likely at the peak of the interest rate cycle and the market expects rates to come down in near future, leading to even further rise in the GDP growth. CPI & IIP data was also released during the week. CPI, although above RBI's comfort level, is still manageable and likely to cool off with Kharif crop. IIP data was great booster for the market. At the peak of interest rates IIP has been keeping a fast pace upwards. In case interest rates do come down in near future it will lead to further rise in industrial production providing further impetus to rise in the equity markets.

Globally, the Federal Reserve in the US also kept rates unchanged and was dovish in its commentary for the future rate cycle. US markets also expect rates to come down in near future providing impetus to growth in the World's largest economy. If rates in the US do come down as expected, it should lead to more fund flows to emerging markets like India.

Let's have a look at what happened on the charts last week

Nifty, as is evident from the above figure is at an all time high and in no resistance zone. Every dip in the Nifty is being bought into. As we had stated in the last blog Nifty still remains "Buy-On-Dips". Nifty remains in a very strong up trend and is likely to inch forward. Support for Nifty is around 21000 and resistance around 21500-21600. Up trend in Nifty remains intact till the time it closes below 20500. 

BankNifty, which was the leader in the last run lagged behind in the first part of this up trend but more than made up for the laggardness in the last couple of weeks to post closing above 48000 level. BankNifty has also entered an uncharted territory and is in no resistance zone. Support for BankNifty is placed around 47100-47000. and it may face resistance around 48500-48600.

All in all first fortnight of December has been a dream come true rally for the Bulls and investors have become richer every passing day. We expect many such moves in coming years and we should see Nifty becoming a 6 digit index in a decade or so.

Till such time keep accumulating good quality stocks.

Happy Investing!!!

"Trend in the market remains unchanged until and unless clear reversal signals occur" ~ Charles Dow (Dow Theory)

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 8th December 2023

Dear patrons, as I write this edition of weekly blog, we are sitting pretty at an all time high on almost all indices. The Indian markets have shown tremendous strength over the last month or so. Benchmark index Nifty posted consistent gains on all but one trading session over the last week and added almost 3.5%.

Election results in 5 states were in favor of the ruling BJP, which was welcomed by the bulls. These elections were treated as a precursor to the general elections next year, and the ruling party getting a thumping majority is good sign for the future.

On the economic front, RBI's Monetary Policy Committee announced its bimonthly policy, where in interest rates have been kept unchanged and the governor was pretty dovish in his stance for the future. Indian economy has been resilient over the tumultuous period of pandemic, wars and slow-downs. The RBI has been very proactive in its approach and navigated very smartly through this period. We believe we are at the peak of interest rate cycle and should soon see rates lowering. Lower rates should provide further impetus to an already buzzing economy, propelling it towards newer highs in coming years. Fall in crude oil prices also augurs well for the Indian economy as it eases a lot of import bill.

Global markets have been quiet for some time now. Indian markets are outperforming peers by a fair margin. We believe that this outperformance will continue in time to come and a massive realignment will take place in global order.

Let us have a look at what happened last week and try to figure out what is in store for next week.

It was one way traffic in the markets last week. Bulls made a mess of bears and catapulted the benchmark Nifty towards 21000 from around 20000 in just 5 sessions. We are in an uncharted territory on the Nifty and some resistance may be faced around 21000. Market remains "Buy-On-Dips". It may be a prudent idea to book some profit and stay on cash for the time being and wait for some corrective action to reenter. 

BankNifty, which was lagging till last week was a front runner last week, outperforming the Nifty and making a new all-time high. BankNifty is also in an uncharted territory and may rise some more. 46000 appears to be support. BankNifty also remains "Buy-On-Dips".

Interesting time lie ahead for the Indian investors, as the indices climb newer highs. Traders have to be judicious in selection of stocks. We are cautiously optimistic on the market. Future looks bright.

Stay Invested!!!

“The most important quality for an investor is temperament, not intellect.” ~ 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.

Week Ending 1st December 2023

Dear patrons, the markets were in a buoyant mood over the last week, ending a streak of lull of a week or so. Nifty scaled a new All Time High as predicted in our previous blog (you may read it here Weekly Market Update: Week Ending 24th November 2023 (amitbajare.blogspot.com)). As we had predicted markets moved up swiftly clocking gains of over 2% in a truncated week.

Global cues were robust over the previous weekend. Domestically very good set of GDP Growth numbers added oil to the already red-hot markets. India's GDP grew by 7.6% in Q2FY24, making it the fastest growing big economy in the world. It was a positive surprise for the markets and the bulls took full advantage of this good news propelling the markets to new ATH. India is estimated to grow at 6.5% for FY24.

Although Nifty achieved an ATH, the BankNifty remained some distance away from its ATH. The markets are expectantly waiting for election results. Favorable outcome in the elections may lead the market to newer highs and any divergence in results may lead to a small correction.

Let us have a look at the charts and try to figure out what lies in store for next week.

Nifty made a new ATH last and is in an uncharted zone, RSI, however is showing a divergence, which, points towards a probable corrective move. In case Nifty moves down it should find support in 20000-19800 range. On the upside, we may see some more traction and profit taking may emerge after election result euphoria dies down. 

BankNifty has been underperforming compared to Nifty. It has remained subdued in the last month, managing to gain some ground only in the last week. 44000 happens to be a strong support for BankNifty. Sustaining below 44000 BankNifty may drift towards 43500.

All in all traders should be cash ready and look for opportunities to buy in case of any dips in the markets. Till the time Nifty is above 19400 market remains Buy-On-Dips.

Happy Investing!!!

"The biggest risk of all is not taking one." ~ Mellody Hobson

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 24th November 2023

Dear patrons, the week gone by was lackluster on the indices with focus shifting to stock specific action. The benchmark index participants were in a consolidation phase and midcaps along with small caps were in the limelight with both indices making life time highs.

Globally also it was a lack luster week, with almost all markets trading in a range. On news front as well, there was no event which made headlines. Something is surely brewing in the equity markets across the globe and by all means it looks like it is going to be good for investors.

Foreign Institutional Investors had a muted participation last week barring last trading session where they turned aggressive buyers. Domestic Institutions have been buyers through the last week. Coming week being truncated and expiry week as well, should see volatility spiking up and swift movement in both directions can be seen.

Let us look at what exactly the indices did last week and try to anticipate what is in store for the next week.

We had stated last week that Nifty has resistance around 19850-19900 levels and support around 19300. The Nifty made a low of 19380 and a high of 19875. For the coming week Nifty has support around 19600-19700 failing which, it may drift towards 19400. Nifty may surprise on the upside though, owing to expiry week. Short covering along with fresh buying may lead Nifty towards new highs.

BankNifty, which was sedate for the first half of the week managed to hold its head above the crucial 43400 mark and looks set for an up move with resistance around 44000. Closing above 44000 should open doors for further up move towards 45000. BankNifty appears to be a strong candidate for short covering next week on account of monthly expiry.

Traders need to be nimble footed as moves could be swift on either side. Mantra remains the same for investors though, keep accumulating good quality stocks.

Stay Invested!!!

“The intelligent investor is a realist who sells to optimists and buys from pessimists.”~ Benjamin Graham

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 17th November 2023

Dear patrons, the Indian markets are on a role for last few weeks holding ground and being resilient to the financial as well as geopolitical situation around the globe. In the week gone by indices on the NSE and BSE posted decent gains and ended UP almost 1.5%.

Rise in the markets can mainly be attributed to the fall in inflation both in India as well as the US. Drop in inflation in the US was a substantial 0.5%, highest, for a long time. India CPI also came down from 5.2% to 4.87%. Easing inflation augurs well for the equity market as the pressure on interest rates will also ease and we may see higher liquidity in the system prompting investors to switch to risk ON mode. 

Back home, we are consistently witnessing robust growth in the economy, the results season being a testimony to rise and rise of the Indian economy. Rise in economy is the booster to the propulsion of the equity markets towards newer highs.

Let us now look at what transpired in the last week and try to figure out what lies in store next week.

As we can see, Nifty rose in the last week owing to good inflation data. Nifty has strong support in the 19350-19400 zone and resistance in 19850-19900 zone. Closing above the resistance zone should propel the Nifty to newer highs in near future. In case of any adverse event a close below 19300 may lead the Nifty towards 18900, which should act as a very strong support and we are unlikely to witness levels below 18900 in near future.

BankNifty on the other hand was hit by the new RBI regulations on personal loans, where the risk weightage was increased from 100% to 125%. The move by the RBI is likely to impact the earnings of many Banks as well as NBFCs adversely. The steps taken by RBI, although look to be negative for NBFCs particularly, should lead to cleaning up of the personal finance business and reducing risk to the overall economy. BankNifty has strong support around 43400-43500. Close below 43400 opens doors for further downward movement. 44000 should act as resistance and a close above 44000 should lead the BankNifty towards 45000 and beyond.

In the meanwhile keep accumulating good stocks and keep booking profits as well. Ample opportunities are available in the markets to make good profits.

"Far more money has been lost by investors trying to anticipate corrections, than lost in the corrections themselves.” ~ Peter Lynch

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.

Adani, Hindenburg and India

We are all aware about the report published by professional short selling firm Hindenburg against Adani group. The said report has resulted in fall of share prices by more than 80% from recent highs. All Adani group shares have borne the brunt of this report. What this fall in share price has done, is that it has managed to dethrone Gautam Adani, Chairperson of the Adani group from top ten billionaires in the world from the position of 2nd rank. Is this a conspiracy against India or just another strategy in the market?

Well, from the looks of it, it may look like a strategy but actually it is deep hatred ingrained in the western society for a brown man getting into an elite club, of which, only white skinned had the monopoly. Adani was not only a member of the elite club, but he threatened to dethrone the number one. 

Secondly, India is taking huge strides in becoming a developed nation from a so called third world country. This growth is not very well digested by the developed world. Huge amount of Foreign Direct Investments are on their way to India. India is likely to become the world’s manufacturing hub, replacing China. India has already taken over the UK as the 5th largest economy and is likely to be among top 3 in the next decade. This growth has been largely driven by Indian businesses like Adani group. Once one breaks the back of growth in businesses, the economy is automatically affected resulting in job losses, lower income and overall stagnation or downward movement of the GDP.

No doubt Adani group has debt, so do all the businesses. No business or country can effect growth without debt. If we look at the debt by countries in comparison to the GDP, we find that India is ranked 17th in overall debt with close to 20% debt to GDP ratio, whereas the US has close to 120% debt to GDP ratio while Singapore tops debt to GDP ratio among top 20 countries with a whopping 470% debt to GDP. When we look at individual companies we find that although Adani has debt, it is not the biggest debt company in India. Also, of the total debt owed by Adani around 25% comes from Indian banks and rest from overseas bonds and loans from foreign entities. Adani group is estimated to have a debt of around $ 30 billion, which is nothing compared to the top debt owner TOYOTA having close to $ 186 billion debt. Adani doesn’t feature in top 30 in the list. As far as Indian companies are concerned NTPC alone has almost the same debt as the entire Adani group. To add to that Adani Enterprises, the flagship company of the Adani group has been consistently clocking profits for last four quarters. YoY company went from loss to profit in Q3FY23.

Why single out Adani then? The answer lies in the growth of the company outside India. All of this started the day, the company acquired coal mines in Australia. And to add to it, the group acquired various ports and mines across the world from Sri Lanka to Israel. The question of whether the group has government backing or not does not arise here. If government backs Adani group, it is the duty of the government of the day to back any Indian business in growth and going global. No one has ever uttered a word when China backed its companies with low interest loans, subsidies and all other support and flooded the world with cheap Chinese products. Why should anyone cry foul if any Indian company is backed by its government.

Let us come to the old, opinionated, rich and dangerous George Soros. Soros is a degenerated rich man finding solace in someone else’s misery. He is that contemptuous person who made his fortune by selling his own ilk to the butchers of the Nazi forces. This wily old degenerate has the audacity to lecture us on democracy, which is thriving and prospering in India. We know what democracy is and how it works. A third rate scum like Soros has no business lecturing us on it. His failed attempts for a regime change in India has rattled the wily bastard. This is the reason he has chosen Adani shoulder to fire against India and Indian democracy.