Week Ending 3rd March 2023

Dear patrons, over the last month or so we have witnessed a roller coaster ride in the Indian markets. The markets have been topsy turvy for close to a year now and there seems to be no reprieve from volatility on account of global economic turmoil.

Indian markets started the week on a somber note. The preceding week had seen a fall of around 2.5%. Opening couple of days saw the Nifty consolidate around the 17200 mark and it remained rangebound in the range of 17450 to 17300. Friday, however, saw a strong bout of buying and Nifty managed to cross the 17500 barrier and closed positive by more than 1.5%, closing above the crucial 200 EMA. There is a tug of war going on among DII and FII. The FIIs have been sellers for most part of the week however, the DIIs have emerged as a force to reckon with, matching FII selling with almost similar amount of buying.

The big buying figure by FIIs is on account of Rs. 15000 crore stake acquisition in 4 Adani group companies. The Indian Rupee has managed to gain some lost ground against the USD over the last week. Though not a substantial gain, INR has shown some strength. 

As we can see in the above chart Nifty has completed its 5th wave correction. It looks poised for an up move towards 17800. Resistance around 17800 may be stiff and hard to overcome. If Nifty manages to close past 17825, move towards 18300 is on the cards and Nifty may sail towards it in a jiffy. 

As far as BankNifty is concerned, it has managed to close above its 100 EMA. BankNifty is in its 4th up wave and is likely to move towards 42500 in this series. If and when BankNifty reaches 42500, it will be time to be cautious on it.

In the meanwhile, accumulate good quality stocks in every dip. The markets are presenting a good opportunity for short term trades to be executed.

Long term Indian markets look to be in a bull phase and investments should be rewarding. Till the time geopolitical event take center stage the markets may remain volatile and present opportunities in both directions. Traders need to be nimble footed and cautious.

Happy Investing!!!

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 July 2021

Markets were in a buoyant mood over the last week. Indian bourses started the week a tad below 15700 but soon shrugged off the negative bias and moved upwards. The upward trend continued for the next four days with the markets closing the week clocking an all time high on the Nifty.

The markets look well shaped to move further upwards and cross the critical 16000 levels on the Nifty. The pic below indicates that the Nifty has closed just above its resistance and should have enough legs to move towards 16200.

Good quality large and mid caps look good and attractively priced. Try to accumulate this stocks on regular intervals.

Stay Invested!!!

Happy Investing!!!

Week Ending 2nd July 2021

Dear Patrons; the week gone by started on a positive note; the indices on the Indian bourses made a record high on the first trading day of the week. The markets were; however; unable to sustain the rise and fell off from the highs to end in the red on four out of the five sessions. Friday also saw a somber opening but the bulls gathered momentum as the day progressed and the markets ended the session on a positive note.

Markets were mostly driven by global news flow last week. Domestically we are doing fine. The second wave of the pandemic looks under control. More places are opening up for more time. Domestic consumption looks on the rise as is evident from the auto sales numbers. Globally also the situation related to the pandemic is under control and economies globally are trying to gather momentum. The markets, however, as is their habit were looking forward towards interest rate increase in the US in 2022 and were on a selling mode.

On domestic front Reliance AGM acted as a dampener for the markets. A big ticket event which was not good enough for the markets to move up.

As can be seen from the above chart, Nifty looks to have bottomed out for the coming week. Targets of 16100 are visible on the Nifty. The Vix also indicates strength in the markets. Indices should make new high in the coming week and sustain around the 16000 mark on the Nifty.

Banks, private as well as PSUs, should be in the reckoning for the next week, along with oil and gas sector. One should be accumulating good quality banking stocks in each fall.

FMCG should also in the watchlist, as the sector looks to be gaining once the lock downs are over.

Stay Invested!!!

Happy Investing!!!

Week Ending 18th June 2021

 Dear patrons, the week gone by did not have much to cheer for the investors. Markets lost considerable ground albeit to regain at the fag end of the last trading session. The recovery though looks like driven by short covering more than fresh buying; which may be an indicator to more fall in coming days.

Markets were waiting for some trigger after a lack luster week. The Federal Reserve meeting happened to be trigger for the markets. The FED maintained status quo in the interest rates but hinted at increasing rates earlier i.e. in 2023 rather than in 2024 sated previously. The reason behind increase in interest rate is rise in inflation; which is at historic high. Although 2023 is a fair distance away, the markets got spooked by this announcement and resorted to sell off.

Locally there was no news flow to dampen or cheer the spirits of markets. The benchmark indices were mostly driven by global events and actions. Barring the exception of frontline IT stocks every other sector bore the brunt of a sharp sell off. 

As we can see in the picture above Nifty closed just around support levels. Coming week being the monthly expiry, is expected to be volatility. We may witness more fall on indices. Nifty has strong support around 15000, which is a fair distance away from current levels. 

Time looks ripe for accumulation of good stocks in each fall. Every fall in the markets is a God send opportunity to accumulate stocks. We would recommend to buy good quality stocks in this fall.

Stay Invested!!!

Happy Investing!!!

Week Ending 11th June 2021

Dear patrons, it was yet another week of mid cap outperforming the large caps in the markets, as was expected and mentioned in the last blog. Nifty moved in a narrow range of 300 points for the week, making newer highs on multiple occasions. What is the reason for such move on the indices? Let's see one by one.

Global markets as always had a role to play in the moves on Indian markets. The US markets stood firm amidst concerns over rising inflation. The inflation data in US was supposed to be a big concern for the markets but the markets shrugged off the rising inflation. In fact the bond yields have dropped a fair bit after the inflation data, which is rather surprising. Fall in the bond yields lent support to buying in the equities. As we have been saying "Cash is King", liquidity drives the markets and is able to overlook basic rules of economics.

Locally we had robust GST collection, exceeding 1 lakh crore yet again. It only proves that Indian economy is very much driven by local demand. Many states which were under lock down have started opening up and this should augur well for the markets. Monsoon, the biggest driver of the Indian economy has arrived on time and with a bang in the country and is taking big strides, spreading very fast throughout. Prospects of bumper kharif crop augur well for the economy and the markets. The pandemic also looks reasonably under control.

As we can see from the comparative charts of Nifty and Bank Nifty, the Bank Nifty has underperformed. Private banks have been laggards in this rally on the Nifty. PSBs, however, have outperformed the private banks. The stage looks set for the Bank Nifty to move northwards now. While Nifty has been making new highs, the Bank Nifty is a fair distance away from its all time high. Banks are the biggest contributors in the Nifty index, any move in banking space has high impact on Nifty.

All in all the future looks bright for the markets. Traders should be nimble footed as always. Look for good quality stocks to trade. Markets may become tricky to trade, be cautious at higher levels.

Stay Invested!!!

Happy Trading!!!

Week Ending 4th June 2021

Dear patrons, the markets have had a roller coaster ride over the last year or so. In fact the markets have rallied and achieved new highs over this pandemic ridden phase. As they say "Cash is King", this market rally has been and is being driven by liquidity. There is ample liquidity around the globe with almost all governments providing packages to provide impetus to the economy. Economic activity has been hampered due to the ongoing pandemic. The pandemic now seems to be in control and we are likely to come out of the situation with the help of vaccines.

Let's now focus on what transpired in the markets over last week and how are they looking for the next week.

Last week markets were in buoyant mood. Domestic as well as global cues were on the positive side. The MPC came out with its decision to hold interest rate status quo, which added further fuel to the ongoing rally. The RBI Governor stated that the banking regulator will undertake all necessary actions to revive growth. RBI also stated that the Indian economy is expected to grow fastest in the World over next financial year. The growth rate was, however, revised downwards from 10.5% to 9.5%, owing to the horrific second wave. We believe the worst is over as far as the pandemic is concerned and markets have priced in that possibility. Moving forward the Nifty is likely to move upwards towards 16000.

As we can see the rally started from 14150 and should have enough legs to move towards 16000.

Midcap stocks have been participating in this rally big time. We believe that they will outperform large cap stocks for some more time. Once this rally is over, it will be prudent for investors and traders to chose stocks wisely and be nimble footed in trades.

We like select stocks in PSU sector along with PSBs. Select stocks in private sector are also slated to gain handsomely over next few weeks.

Stay Invested!!! Happy Investing!!!

Week Ending 18th September 2020

Dear patrons, yet another lackluster week went by without much action in the markets, barring a very eventful last one and a half hour on last trading day of the week. In last couple of hours of trade during the last trading session, markets saw a big sell off. Nifty and Bank Nifty both bore the brunt of this sell off losing a lot sharply. Bank Nifty was severely punished losing almost 300 points in less than 5 minutes.

The fall in Nifty was attributed to the Indo-China confrontation on the Eastern border and a second front likely to open on the western border. Also, the FOMC commentary in the US was a bit hawkish sending the US markets down impacting global markets. 

Nifty followed the pattern that we suggested in the last blog. Nifty went to 11550-11600 range during the week twice and rebounded sharply on both the occasions. In the first instance Nifty turned from 11568 to move below 11400, though it turned sharply during further sessions to achieve 11600. After closing marginally above 11600, Nifty again started to correct closing the week a tad above 11500.

Bank Nifty, on the other hand remained in a range of 22700 to 22000, mostly remaining volatile. Being the biggest contributor to the Nifty, any move in Bank Nifty has a big impact on the Nifty. Banks and NBFCs lost sharply Friday with many closing with a big negative tick.

The Pharma index managed to hold on to impressive gains during the week, keeping Nifty afloat amid the avalanche in the Banking space. We expect the pharma companies to do well during the pandemic and even after it is over. It remained a silent spectator during the Banking, IT, Engineering, Auto rallies, now time has come for the pharma sector to show some gains. Investors, however need to chose and pick stocks in this sector. 

Coming back to Nifty, Nifty remains weak as long as it trades below 11600. The current formation is hinting at a fall in Nifty towards 11300-11200 range, with 11000 acting as a strong support. One needs to be cautious in taking a trade in the current environment. We saw huge selling in Index Futures on Friday and  it might just be the start of the fall.

Many big-wigs like SBI, Kotak Bank, Reliance, HDFC twins, L&T et all are looking weak on the charts. There may be space in these stocks on the downside. Banking in particular looks vulnerable on all time frames and may correct further.

Be choosy in buying stocks at the current valuations. Investors need to be extremely cautious and nimble footed for the next month or so. Mantra remains the same, accumulate good quality stocks.

Stay Invested!!!

Happy Investing!!!