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.

Week Ending August 23rd 2024

Dear patrons, after a lackluster first fortnight in August, bulls roared back in action and took control of the Indian markets amidst global rally. Positive news flow from across the globe as well as incessant buying by domestic investors propelled the benchmark index within touching distance from all time high level.

Although, the FIIs have sold close to 29000 Cr worth of stocks, buying by domestic funds kept Indian markets from sinking lower. The markets did correct close to 5% from the top. Lot of stocks are available at a handsome discount, particularly in the mid and small cap segment.

Globally the mood was buoyant owing to dovish statement by the Federal Reserve Chairman regarding rate cuts. The Fed chairman made it clear that he is now looking to cut rates as early as next month. The quantum of the cut will depend on further economic data. The intent by the Federal Reserve augurs well for the markets globally. We expect once the rates are slashed in the US, lot of bankers around the world will follow suit and lower interest rates, triggering massive liquidity infusion in the economic set up and in turn giving added fillip to the stock markets.

Back home, Indian markets have made steady gains over the week gone by. Benchmark, Nifty clocked over 1% gain and closed just a tad below its all-time high weekly closing. BankNifty has also performed well over the last week closing well above its resistance around 50800.

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

As we can see Nifty is approaching its all-time high levels. We expect it to surpass these highs in the coming week. The global markets are supportive of the up move and coming week being August series expiry week, we may witness a rally on account of short covering. 24600-24500 remains strong support range for Nifty whereas 25100-25200 should act as resistance. In case Nifty manages to close above 25200, it may see sharp move towards 25500 and above,

BankNifty remained range bound with a negative bias over the first fortnight of August and bounced back towards its crucial resistance of around 51000 in the later half. It should find support around 50800-50600 range, while resistance lies around 51100 and above at 51400-51500 range.

Many of the sectoral indices have outperformed the benchmark indices and we believe the trend should continue over next week. Volatility may be high due to monthly expiry. Traders need to adhere to strict stop losses and avoid over leveraging. Any dip in the markets should be utilized to accumulate good quality stocks.

Stay Invested!!!

"The reason you need a trading plan is to ensure you don't trade based on emotion" ~ Nial Fuller

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 16th August 2024

Dear patrons, we are witness to one of the most enthralling periods in our stock markets. Amid chaos globally on economic front India is emerging as a shining star and hope for the World. Indian stock markets are part of this resurgence, and we believe we are poised for a much more in time to come.

In a truncated news heavy week markets started a bit slow and couldn't decide direction. Important numbers like IIP, CPI were to be announced locally as well as globally. Inflation dropped to a 3 year low in the US, bolstering hope for a earlier than expected and higher than expected rate cut from the Federal Reserve. Other economic data also suggests that the World's largest economy is trying to recover. Last week the US markets surged more than 5% whereas the Japanese markets saw a rise of a whopping 9%. Our own markets were very subdued at the start of the week but returned from the Independence holiday and had a stellar rally ending a not so good week at mid-week session to a decent week at the end.

Falling crude oil prices augur well for the Indian markets along with robust corporate earnings and strong retail participation. We expect the markets to continue momentum next week amid global rally.

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

Nifty found support around 24000 levels and reversed sharply Friday to close above 24500. Nifty may face resistance around 24600-24700 levels and strong support around 24000. Close above 24700 may lead Nifty towards 25000 and above. Setor specific action is likely to continue in the markets with certain sectors outperforming the Index. Certain Mid and Small cap stocks are also likely to outperform the Indices.

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 03rd May 2024

Dear patrons, the Indian markets have been extremely volatile over the last few days. Big moves on either side intraday have become a norm amid rising vix. During this volatile phase both the benchmark indices on the NSE along with the Sensex have managed to touch record high levels. 

Global markets have also been quite volatile gaining smartly and losing sharply during intraday sessions. The US markets reacted to the FED policy meet outcome by losing sharply one day and recovering all lost ground in subsequent sessions. The FED looks in no hurry to cut interest rates owing to high inflation. Higher interest rates have caused the economic growth to slow down in the US leading to a global slow down.

Geopolitically, world is a much quieter place compared to two weeks back. Middle East is relatively calm rendering crude oil cool off from recent up move. Precious metals, after gaining smartly over last month or so have also seen profit booking.

Domestically, we are in the middle of the World's biggest elections, which are moving smoothly so far. In a month from now a new Government will be in place in India. Indian economy has remained resilient and has been growing at a fast pace, cashing in on demographic dividend with local demand outweighing global demand. Trend for Indian economy is likely to remain in the upward trajectory placing it among top three in near future.

Let's now have a look at what happened in the markets over the last week and what lies in store for coming week.

In a truncated week Nifty managed to scale yet another peak in the vicinity of 22800. It lost considerable ground every time Nifty tried to go past 22800. For the time being it looks like Nifty will spend some time consolidating in a tight range of 22300 to 22800. A close below 22300 may lead to further fall in Nifty towards 21800, which should act as a strong support. 

BankNifty also managed to make a record high last week, although it remained subdued compared to Nifty. BankNifty faces resistance around 50000 mark. It may as well spend some time in the range of 48800-50000 levels. In the event of close below 48200 it should find strong support around 47000 range. Till the time BankNifty is able to hold its head above 48200 it remains "Buy-On-Dips".

Other than the benchmark indices many sectoral indices along with midcap and small cap indices have touched new record high levels. Midcap index looks set for gaining some more with a support around 50550 level. 49800 should act as strong support for Midcap index.

Record collection of GST for the month of March is an indicator to the growth that the Indian economy is witnessing. Rising consumer demand and capex in infrastructure by the government should lead to more growth in coming months, outpacing global peers comfortably, India is marching towards $5 trillion economy.

Investors should try to accumulate fundamentally good stock with every fall. Traders have to be nimble footed and adhere to strict stop losses in these volatile moves. There is ample opportunity available in the market for traders.

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.

Week Ending 19th April 2024

Dear patrons, first of all let me apologize for not posting this blog for over a month. Lot has happened in the markets over this period amid global volatility and geopolitical tension. Not delving too much in the past let us focus on what happened in the last week and try to figure out what is in store for coming week.

Last week all the global markets were jittery on account of geopolitical tension prevailing in the middle east. World is staring at a potential world war if issues between the warring countries are not resolved quickly. In an already fragile atmosphere for global economies in the aftermath of the pandemic, the war could not have come up at a worse time. Global economies are already fighting very high inflation and a war at such a juncture threatens to put crude oil on the boil worsening inflationary pressure on central banks globally.

The US markets were extremely volatile last week due to war as well as diminishing chances of an early interest rate cut. Better than expected inflation data coupled with uncertainty on crude oil front led to selling pressure in the US markets, spreading the same sentiment across the globe.

Back home, our markets also felt the jitters of the ensuing war and lost heavily in first two sessions. After the holiday mid-week, however markets showed some stability and found support around 21800 and rebounded and managed to close above 22000.

As we can see in the above pic Nifty managed to hold on to very crucial support of 21800. Going ahead we believe 21800 will act as strong support for Nifty and we are unlikely to see lower levels. 21800-21600 should act as very strong buying zone for Nifty, whereas 22300 should act a resistance. Close above 22300 may propel Nifty towards 22600-22700 levels. Markets remain "Buy-On-Dips" till the time Nifty manages closing above 21600.

Coming to BankNifty, BankNifty managed to take support around 46600, which on all accounts should act as strong support. 47600-47800 range should act as resistance on BankNifty. Close above 47800 may lead BankNifty towards new All Time High levels.

Investors need to focus on quality and keep accumulating in every fall. Traders should be nimble footed and adhere to strict stop losses keeping in view the volatility in the markets owing to news flow. Markets may remain highly volatile on account of news emerging from the war zone as well as monthly expiry of the derivatives contracts.

“If I’d only followed CNBC’s advice, I’d have a million dollars today. Provided I’d started with a hundred million dollars.” ~ Jon Stewart

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 07th March 2024

Dear patrons, in yet another display of stellar performance, the Indian markets scaled new highs last week. Both the benchmark indices the Nifty as well as Sensex made new lifetime highs in the week. Banking sector proved to be the major booster for indices to reach new highs. Almost all banking stocks were at their all-time high levels last week following robust GDP data and forecast.

Flow of incessant good news for the Indian economy continued last week on the back of impressive GDP figures for Q3FY24. The RBI projected Indian economy to grow by 8% surpassing Government of India's forecast of 7.6% in FY24. Further, rating agency Crisil has forecast Indian economy to grow by 6.8% next fiscal and remain world's fastest growing big economy.

Globally Federal Reserve will declare their monetary policy on 20th March and is expected to maintain status quo. Markets expect rates to come down from as early as May. The Fed chairman's address last week was, however, a misnomer for the markets. The chair indicated that the Fed is ready to cut rates only when economic data supports such rate cut. On the back of these statements, the US markets remained sideways amid volatility.

Let's see what transpired last week and try to forecast what lies ahead for next week.

Nifty, as expected, moved towards 22500 and managed to close a tad below 22500. It was volatile for the week with movement on both sides. Nifty too support around 22200 levels as mentioned in the previous blog. You may read it here Weekly Market Update: Week Ending 2nd March 2024 (amitbajare.blogspot.com). Nifty looks a bit tired and may remain rangebound for the coming week. Action is likely to shift to sectoral indices and certain sectoral indices are likely to outperform the benchmark index while certain other are likely to under perform. Support for Nifty lies around 22300-22200 levels, while on the upside Nifty enters uncharted territory and resistance may be encountered towards 22650-22750 levels.

Bank Nifty's out performance continued last week as well, and it managed to gain in excess of 1% for the week. It moved to touching distance to its all-time high. As expected, it moved up but could not hold on to gains above 48000 and closed a tad above our resistance level of 47800. In the coming week it is expected to move with a positive bias towards lifetime high. Support for BankNifty is placed around 47400-47300 while resistance lies around 48600-48700. 

Broader markets may remain range bound, and action may shift to sectoral indices, with a focus on stock specific moves. Traders may look for opportunities in certain sectors for positive returns.

Happy Investing!!!

1. "To be a successful business owner and investor, you have to be emotionally neutral to winning and losing Winning and losing are just part of the game.” ~ 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.

Week Ending 2nd March 2024

Dear patrons, it has been an eventful last week witnessing yet another Life-Time High on the benchmark indices namely Nifty and Sensex. Markets were volatile though the week on account of February series expiry and witnessed a brutal sell off a day before expiry. Nifty plunged below crucial 21900 level on intraday basis but managed to close above it and continued its upward move towards a new high on commencement of new series on Friday.

On economy front, the Indian economy grew by a whopping 8.4% during Q3FY24. Barring pharma all sectors grew handsomely, some even clocking double digit growth. India is outpacing its contemporaries by some distance where in the second-best growth is registered around 5.5%. The overall estimate for India's growth has also been revised upwards from 7.3% to 7.6%. The Current Account Deficit is also contained within expected range.

Globally all major markets are in good shape with the US markets making new highs. This week it was the turn of Nasdaq to make a new lifetime high, following the S&P. Majority of central banks are likely to ease stand on monetary policy sooner than later which should lead to higher liquidity and more growth. We are most certainly at the peak of interest cycle and should soon witness softening of interest rates worldwide.

Lets now try to figure out what lies in store for us for the coming week.

We can see Nifty falling sharply on Wednesday and then move up even more sharply to regain lost ground and make a new ATH. We had mentioned about 21900 to act as strong support in the last blog. Nifty for a brief period went below 21900 but managed hold head above this level and zoomed beyond 22400 within a span of 3 days. You may read about it here Weekly Market Update: Week Ending 23rd February 2024 (amitbajare.blogspot.com)) 

Nifty may pause for some time and a correction is not ruled out. 22400-22500 range should act as resistance, while 22200-22100 range should act as support. Major support lies around 21800 and may prove to be unbreachable for Nifty

BankNifty has outperformed Nifty last week. As mentioned in the previous blog 47500 still remains elusive. Resistance for BankNifty has shifts upward this week towards 47800-47900 range and support moves to 46700-46600 levels.

In the mean accumulate good quality stocks in every dip.

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.