Week Ending June 27th 2025

Dear patrons, the Indian markets saw a stupendous rally in the week gone by. Benchmark Nifty ended the month of June with a 4% gain over previous month while the BankNifty posted a 3% MoM (month on month) gain. Almost all sectoral indices also closed in the green for the week. Easing geopolitical tensions and falling Crude Oil prices have prompted investors to shift to "Risk On" mode. In the "Risk On" mode we may see some softening in precious metal prices along with commodity prices.

Indian markets remained resilient during the turmoil around the globe be it geopolitical or economical. A lot of credit for the Indian markets' stability goes to the Domestic Institutional Investors. Rising confidence in Mutual Funds by retail investors has transformed into rising AUMs (Assets Under Management) for various AMCs (Asset Management Companies). Big corporates are also playing along by parking their idle funds with respective AMCs to boost Domestic strength.

Globally, the US markets were very buoyant after announcement of cease fire in the middle East and release of Fed statement. The Federal Reserve chair promised two more cuts in the year irrespective of inflation and state of economy. The statement fueled rally in all indices in the US, with the S&P 500 rising to a lifetime high. European markets were also largely positive. As the deadline for implementation of tariffs draws closer, we may see some jitters in the markets.

Back home, falling Crude oil prices along with falling Dollar index augurs well for the Indian markets in the near future. Fall in Crude prices reduces India's import bill thereby reducing the Current Account Deficit, which in turn pushes Capital Expenditure by Government northwards. In fact, the CAD for January-March 2025 quarter swung into surplus, clocking nearly $14 bn in the positive, that too amid 3 wars.

Let us now try to figure out what lies in store for our markets in the coming week.

As we can see Nifty moved higher gaining more than 2% over the week. A lot of this up move can be attributed to short covering on account of the June series derivatives contract expiry. Nifty achieved 25500 as mentioned in the previous blog and surpassed our target to close a tad below 25650. For the coming week Nifty may face resistance in the 25800-26000 range. 26150 appears to be the target for this rally and a close above this level may trigger further up move towards new lifetime high levels. On the downside 25200-25000 becomes a strong support zone for Nifty. As long as 25000 holds it remains a "Buy-On-Dips" market.

BankNifty has been the early mover in this rally. It is comfortably placed at a lifetime high ready for further push in the no resistance zone. Banks and NBFCs have remained flavor of the markets for some time now and are expected to remain top picks for institutions, thereby lending strength to BankNifty to move further ahead. 57800-58000 should act as immediate resistance. Close above 58000 may lead BankNifty towards 60000 in a hurry. On the downside 56400-56200 should act as support.

Markets are looking strong and a surplus CAD resulting in more capex should provide more impetus for further up move. Extension in tariff deadline is on the cards, which again, is a positive for the markets. Investors should look to accumulate good quality stocks in select sectors. 

Stay Invested!!!

“Everyone has the brainpower to make money in stocks, not everyone has the stomach.” ~ 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. 

Week Ending June 20th 2025

Dear patrons, the Indian markets have been quite volatile over the last few days. Geopolitical tension has played a key role in this volatility. Situation across the middle East remains extremely capricious casting a shadow of war over the entire globe.

Indian markets have a lot to cheer as well as worry about. In an unprecedented move the Reserve Bank of India cut interest rates by 50 bps along with a staggered CRR (Cash Reserve Ratio) cut of 100 bps. The RBI has been very aggressive since the new Governor took over. It has pushed huge liquidity in the system through the use of OMOs (Open Market Operations, a whopping 3,00,000 crores), Interest Rate cut and CRR cut. RBI is eyeing impetus to GDP growth. Inflation has played a key role in RBI's bold decision, by touching a multi-year low. Worry for the markets is the ongoing tension in the middle East. Things might spiral into a full-blown war any time. A full-scale war is not good for the World as it may put pressure on Crude, which has already moved towards $80/barrel. Rising crude oil is extremely worrisome for a developing economy like India.

The US markets over the last week remained a mixed bag. The Federal Reserve held status quo in interest rates and there is possibility of two rate cuts during the year. These rate cuts however depend on inflation, which is not showing any signs of abetment. 

Coming back to Indian markets, we saw some sharp up move on Friday. Benchmark Nifty closed well above its psychological resistance of 25000.Domestic institutions have been buying Indian stocks consistently for last three weeks. Foreign investors are slowly but surely turning buyers in the Indian markets. Let's take a look at the charts and try to figure out what lies ahead for the markets in the coming week.

As we can see, Nifty surged past the all-important level of 25000 on Friday. This up move has come after a period of range bound activity over last couple of weeks. In all probability Nifty has broken out of its range and is headed towards 25500. As long as Nifty remains above 24800 it is a "Buy-On-Dips" market. A close below 24800 should open doors for further fall towards 24000. Coming week being expiry week for May derivatives contracts, may see a lot of volatility and a bout of short covering may propel Nifty towards its target in a jiffy.

BankNifty led the rally in the markets. However, it looks a bit fatigued right now. A move above 57000 is needed for BankNifty to scale further high levels. Immediate resistance for BankNifty is placed in 56300-56600 range. Move beyond 56600 should open the doors for 57800-58000 on BankNifty.

A word of caution for traders though. Traders MUST adhere to strict stoop losses. The moves can be sharp and wild given the expiry week as well as news flow from Isreal-Iran skirmish. Markets will provide ample opportunity to trade on both sides. Investors should look to accumulate good quality stocks in every dip. Select sectors are likely to outperform others with big margin, allocating more weightage to such sectors in the portfolio would be more rewarding over a period of time.

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 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. 

Week Ending January 03rd 2025

Dear patrons, the roller coaster ride continues in the markets, with the benchmark indices oscillating wildly to gain some and lose some sessions. While the week before last week saw movement in a very small range last week the markets saw positive closing on three out of five sessions.

World over, the festive atmosphere lead the markets northwards albeit on low volumes. The new year began quite well for the Indian markets as well. Markets now await Q3 results which should decide the markets direction in the coming weeks. Stock specific movements are likely to prevail over broad rallies.

There is rising talk of another virus (Human MetaPneumo Virus or HMPV) wreaking havoc in China. This chatter, however, is more vigorous on the social media. In view of some of the experts, the virus is 60 years old and is found commonly in winter. As the temperature rises after Uttarayan, the virus should vanish. As of today, there seems nothing to be worried about HMPV.

New year should bring along rate cuts in India to the tune of 50 bps in the first half. Capex is likely to increase in the budget.

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

Nifty took support around 23700 as suggested in the last blog and reversed strongly to move towards 24200. Resistance for Nifty lies around 24325. Nifty needs to close above 24325 at least for a couple of sessions to show first sign of trend reversal. It should find support in 24000-23900 range, while strong support lies around 23700. We believe the uptrend should resume in Nifty in coming few sessions leading towards 25000 and above.

BankNifty has looked weaker than Nifty for last few sessions. Support for BankNifty lies around 50500. A break below this level will be bad news for BankNifty. We believe the BankNifty may remain choppy for coming few sessions before a robust rally preempting rate cut in first week of February. Resistance for BankNifty lies around 51200-51300 followed by 51700-51800. Move above 52700 is needed for BankNifty to come out the current trend.

Government of India has declared 2025 as the year of Defence Reforms. This may be time to look at some of the defence stocks. We have been suggesting sectoral rotation in the markets for some time now. 

Top Sectors to Watch: Capital goods, consumer discretionary, data centers, lab-grown diamonds, electronics manufacturing services (EMS), export-oriented sectors, CDMO/CMO pharmaceuticals, precision engineering, semiconductors, real estate, solar and wind energy, textiles, transmission and wastewater treatment.

Stock market wisdom: "The stock market builds wealth over time, not instantly. Trade with a plan, strategy, risk management system, rules, stop loss and profit target."

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 December 27th 2024

Dear patrons, let me first apologize for not being able to write this blog for last week. Markets remained subdued in the truncated week even though it was an expiry week for the December series derivatives contracts. Nifty managed to gain close to 1% over the week, whereas BankNifty also gained more than 1%.

After touching 24800 in the first week of December, Nifty lost momentum falling well below 24000 mark and closed the last week tad above 23800. Fall in Nifty can mainly be attributed to the falling Rupee. The INR has been falling for some time now against the USD and is currently at record low levels.

Solid rally in CY24 faltered in Q4 due to weak earnings, FII selling, and a stronger U.S. Dollar. With mid-cycle slowdown and earnings growth moderation in FY25, indices may consolidate, and sector rotation is expected. However, we believe India's economy remains on track for multi-year growth driven by real estate revival, strong infrastructure activities, and rising corporate capex. Interest rate cuts are expected to boost consumption, reflecting in corporate earnings.

Market momentum remains weak with only 25% of stocks above the 20 EMA and many below the 50 EMA. It is advisable to wait for stability and momentum to return. A pre-budget rally may begin post Uttarayan/Makar Sankranti. In the mean, one can use this time for study and analysis.

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

As we can see in the above pic. Nifty spent the entire week in a small range. It squandered all the gains in early trade Friday. We believe Nifty to remain in consolidation phase for some more time. Resistance for Nifty is placed around 24000 to start with and 24300-24350 thereafter. A break above 24350 should lead Nifty higher. Support for Nifty lies around 23700
and move below this support may lead Nifty towards recent lows of around 23200. 

BankNifty also spent the week doing nothing. We expect BankNifty to consolidate between 50500 and 51500 for some time. It may face resistance in 51600-51800 range while support lies around 50500. Break above 52600 is needed for BankNifty to move upwards while break below 50500 may lead it towards 48000 levels.

Sectoral rotation may happen during this phase of consolidation. It is advisable for traders to look for opportunities in such rotation. In our view Capital Goods, Pharma and Consumer Durables should outperform the benchmark indices.

Investing demands smart work and patience, while trading requires hard work and emotional control. Don't mistake trading for an easy wealth path. Understand the difference and choose wisely.

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 December 13th December 2024

Dear patrons, after spending the first four days in a tight range of 200 points between 24700 and 24500, Nifty had a violent move on either side on Friday to close almost 1% in the green. Nifty also gained mildly for the week. 

Globally, markets were stable with both the Nasdaq making new highs and Dow closing negative. European indices got a boost in the form of rate cut of 25 bps by the ECB effective 18th December.

Last week we tried to define the need for technical analysis. Let us delve into the secrete of becoming a successful trader. To become a successful trader on must adhere to some rules and strategize for profit maximization.

1: Strategy rule for trading: ✓ Define your entry trigger. ✓ Define your exit triggers. ✓ Define a daily target. ✓ Define a daily loss limit. 

2: Money management: ✓ How much capital are you willing to risk? ✓ How much are you capable of losing? ✓ Determine a risk reward ratio. ✓ Think and plan for profits. 

3: Psychology: ✓ Keep track of your feelings, throughout any trading session. ✓ Don't hesitate to trade at a loss. ✓ Don't be overconfident after a winning strike. ✓ Be attentive to the market signals. 

4: Tools: ✓ What indicators do you use? ✓ What tools do you use for analysis? ✓ What tools do you use for risk management?

The key to becoming a successful trader is how strictly one follows the rules.

Let's take a look at technicals and try to figure out what is in store for next week.

Nifty managed to hold onto the important support level of 24500 and closed handsomely positive. For the coming week Nifty has resistance around 25100. Move above this level should take Nifty further upwards towards new lifetime high. Support for Nifty is placed around 24450-24250 range followed by 24000-23800.

BankNifty also spent first four days in a tight range and saw huge swings on Friday. After a plunge of almost 1000 points BankNifty managed to pull back and erased all losses to close around 0.75% in the green. Resistance for BankNifty is placed around 54000, while support lies around 52700. In all likelihood BankNifty should move beyond its recent high levels in coming days.

Traders should have ample trading opportunity on either side. Markets may, however face shortage of volumes and trading activity may remain dull.

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 December 06th 2024

Dear patrons, in a news heavy week bulls came into their own and had a fabulous rally ending the week more than 2% in the green. As expected BankNifty riding on PSB performance lead the rally. Most of the PSBs outperformed the broader market to propel the BankNifty beyond 53000 levels.

The MPC (Monetary Policy Committee) of the RBI met last week and announced its decision. We had mentioned in the previous blog that it is high time for the RBI to reduce interest rates and provide impetus to growth. The RBI, although did not cut rates but infused liquidity in the form of cut in CRR (Cash Reserve Ratio) for banks by 50 bps. We believe it is the first step towards rate cuts in next meet.

In yet another news the IMF (International Monetary Fund) has estimated that India can become 4th largest economy in the World in 2025 itself.

We have been trying to figure out market movements using technical analysis for a long time now. Let us see why technical analysis is important in formulating strategy for trading in the markets.

Technical analysis outshines fundamental analysis by focusing on real market behavior, recognizing patterns in historical price and volume data to predict future movements. Unlike theoretical models, which often miss the influence of trader psychology, technical analysis captures market dynamics by closing the gap between theoretical projections and actual market action. By examining recurring patterns, traders can anticipate price movements more accurately. Additionally, its flexibility across timeframes from short-term to long-term trends, enables traders to exploit opportunities tailored to their risk tolerance and trading style. In short, technical analysis provides a pragmatic, actionable framework for predicting price movements.

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

Nifty managed to sustain above the important level 24300 and zoomed past 24800 on Friday. However, it failed to close above its resistance around 24800. Nifty is currently in a upward moving channel with support around 24500 followed by strong support around 24325. As long as Nifty manages to stay above 24300 it remains a "Buy-On Dips" market. Immediate resistance for Nifty is placed around 24800 and a strong resistance happens to be around 25100 range. A break above 25100 should take the Nifty towards recent highs and further.

Coming to BankNifty, we have been consistently bullish on BankNifty for last couple of weeks (you may read it here Weekly Market Update: Week Ending November 29th 2024). BankNifty was stronger of the benchmark indices, gaining almost 3% over the week. It remains in touching distance to all time high levels and we believe it is only a matter of time before BankNifty moves towards 55000+ levels. Immediate support for BankNifty 52700 while resistance is placed around 54000-54200.

Mantra as usual remains the same. Look to accumulate good quality stocks in every dip and 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.