Week Ending 21st July 2023

Dear patrons, welcome to yet another edition of our weekly blog. The Indian markets have been on a stellar up move for last couple of months, moving from strength to strength. Although world over stock markets have remained more or less sticky, the Indian bourses have managed to create all time high closing on multiple days in July.

The rally in the markets has been pushed by the FIIs, who have been on a buying spree for last couple of months. Domestically the money flow in the markets has been consistent. Relatively good numbers so far for Q1FY24 have added to the frenzy.

Fear of a recession in the US has eased considerably with falling inflation and decent demand. The Federal Reserve may no longer fill the necessity to raise interest rates in a hurry, Halting the upward movement in the interest rates should prove to be a boon for the markets,

The result season has begun with IT big wigs announcing decent set of numbers. Infosys however has reduced its guidance by more than half, resulting in sharp cut in stock price as well as indices. Nifty lost its 6 days winning streak on the last trading day of the week owing to weak guidance by Infy.

What is in store for the next week? Let's try to figure out

As the chart shows Nifty is moving from strength to strength. It is likely to have completed its 5th up wave. There is divergence in the RSI on weekly charts, which suggests a corrective move or retracement. The charts are yet to confirm the retracement though. The coming week being monthly expiry week may see whipsaw action and increased volatility. Nifty may witness wild moves on either side.

BankNifty, after remaining sluggish for the first half of the month, has moved up sharply last week, It also looks pretty stretched and showing signs of fatigue. There is divergence in RSI on daily charts of BankNifty and similar to Nifty the confirmation for retracement is pending. Being expiry week volatility in BankNifty will also be high.

Traders may look to buy dips. Both Nifty and BankNifty remain "Buy On Dip". Remain vigilant at higher levels in the indices.

Stay Invested!!!

“Emotional investment is a sure way to make loss in stock markets." ~ Rakesh Jhunjhunwala

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 26th May 2023

Dear patrons, the May series for derivatives contract ended with a gain of around 3%. Looking at the scenario around the globe the Indian markets have given good returns last month. Nifty managed to sustain above the all important level of 18000 for the entire May series. 

The US markets were volatile losing and gaining on successive days. The US economy is suffering with high interest rates and low consumption leading to recessionary fear. US debt to GDP ratio is very high and for the first time in our memory the rating agencies have placed the US in negative watchlist. The US is looking at a possible default if timely raise in the debt ceiling is not approved.

If at all the US defaults it will have huge bearing on the global economy and the stock markets. In the event of default we will definitely head for a recession around the globe. India will not be able to remain unaffected by such recession, although we believe the impact on India will be far lesser compared to the rest of the world, due to India's high domestic consumption.

Whether the uptrend in Nifty continue or will we see some corrective moves in the markets? Let's try and figure out.

We can see on daily chart Nifty has given a strong closing Friday. Nifty is likely to have completed its 3rd wave up and may be ready for a corrective downward movement. In the event of a fall in the markets Nifty has first support around 18200 breaching which it may further slide towards 17800.

Looking at BankNifty, it also looks to have completed its 3rd wave up and may be ready to enter a corrective phase. In the event of fall in BankNifty, it has first support around 43400 failing to protect it may lead BankNifty further down towards 42000.

Traders need to be nimble footed and adhere to strict stop loss. Investors can look for investment opportunities in quality stocks in falling markets.

Stay Invested!!!

Happy Investing!!!

“You cannot make profits in the stock market unless you have the ability to bear losses.”  ~ Rakesh Jhunjhunwala

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 21st April 2023

Dear patrons, as predicted in the previous blog the benchmark indices did a "U" turn and lost more than 200 points for a weekly closing around 17600. We had mentioned in the previous blog that the Nifty is likely to slide towards recent lows. The target remains far from achieved though. You may read about our analysis here Weekly Market Update: Week Ending 13th April 2023 (amitbajare.blogspot.com)

On the global front, markets around the globe remained sideways. Crude oil moved down on economic growth worries. The downward movement in crude is good news for India, as a major chunk of India's import bill is on account of oil, the flip side is, falling crude oil is an indication of falling growth around the world, which in turn may affect India's growth. Although India remains fairly robust domestic consumption economy, recession around the western world may hamper our growth trajectory for some time.

Our markets for the time being should see stock specific action as we are in the midst of results season. So far the result season has been a mixed bag. IT giants have disappointed the investors and bore their brunt, losing heavily over the last week. Two major stocks on the indices announced results Saturday, namely, Reliance and ICICIBANK. It remains to be seen whether the markets like the numbers posted by these companies or not.

Benchmark index Nifty remained in consolidation mode after losing heavily at the start of the week. Coming week being expiry week for the derivatives, is likely to see volatile action and swings on both sides may be in the offing. 

Let's try to analyze move on the indices and see as to what lies in store for the coming week.

As we can see in the above image Nifty dropped heavily at the start of the week and then remained in consolidation mode for the remaining week. The Nifty looks ready for a fall towards 17500 and below in the coming week. Nifty closed just below its support level on Friday and next support is seen around 17500, failing to protect this level it may swiftly slide towards 17000. Nifty has again moved to "Sell on Rise" mode. 

Coming to BankNifty, we did mention that it looks stronger among the 2 indices. It managed to consistently close above the 42000 mark over the entire week. Immediate support for BankNifty seems to be around 41900 failing which 40800 should act as a major support.

Markets may see swing on either direction. Traders should be prepared to ride this roller coaster. Following levels should prove to be rewarding. Market should provide ample opportunity if you wait patiently for levels and adhere to strict trading framework. Do follow stop loss in any event. 

"We don't have to be smarter than the rest, we have to be more disciplined than the rest" ~ Warren Buffet

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 13th April 2023

Dear patrons. the markets over the last week have shown good up move. As predicted in our previous blog the Nifty managed to move up beyond our expectation and scaled newer highs on a daily basis. We had suggested about this up move when Nifty was around 16900 levels and we have been accurate in our prediction.

Global markets remained positive over the last week. With the onset of results season focus now shifts to stock specific movement rather than the indices. Most of the stalwarts of the Nifty will be out with yearly results over next 15 days and the results will set the tone for the markets.

Two IT giants have set the ball rolling with results last week. Both TCS & Infosys declared results last week and both were not up to the expectations of the street. Infosys in particular posted disappointing set of numbers. The markets may not like them and the stock may receive some pounding on the bourses. TCS was not a huge disappointment, however it wasn't a great set of numbers. We may witness overall IT sector being punished on account of poor performance by these stalwarts. The IT index closed below its important support level and is likely to move towards its recent lows.

Coming to Nifty, last week the index remained consistently in the green and managed to close up by over a percent and a half. What lies in store for the coming week? Let's try and analyze.

On the daily time frame Nifty has likely completed wave 4 up and is likely to commence 5th wave down. Technically if this wave pattern holds true Nifty is likely to move down towards recent low and go some more down.

Banknifty on the other hand has made smart gains and is in its upward wave pattern. Wave 3 of this upward pattern looks to have been completed and Banknifty is likely to commence its 4th corrective downward wave. 40800 should act as very strong support for Banknifty.

Traders are advised to be cautious in taking news driven trades in the result season. Any event regarding result may lead to volatile moves on stocks. Adhere to strict stop loss.

"How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case." — Robert G. Allen

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 06TH APRIL 2023

Dear patrons, last week was a truncated trading week with holidays galore, however the markets were in buoyant mood and saw sharp rally to end the week gaining over 1%. As was mentioned in the last blog Nifty moved past first resistance 17400 and closed just below 17600. You may read about it here Weekly Market Update: Week Ending 31st March 2023 (amitbajare.blogspot.com)

The RBI announced its monetary policy last week. In a surprising move the RBI maintained a status quo in the rates, even though inflation remained at uncomfortable levels. The central bank also suggested that it remains accommodative in its stance, paving way for the markets to move upwards. The RBI's move is a bold statement highlighting the belief in the economic stability in the country boosted by the domestic consumer. Globally banks are raising rates due to high inflation. In India, however, the central bank is hardly thinking about inflation and focusing on growth. This boldness should yield results in the coming quarters, and we should see rise in economic activity and a move towards $5 Tn GDP in near future.

India's exports crossed $ 750 Bn mark for the first time. The Government also announced new Foreign Trade Policy last week and impetus is given to exports, aiming for $ 2 Tn by 2030. The target set by the trade policy looks achievable especially with increased manufacturing activity along with rise of India as an arms supplier. 

Let us now try and analyze what's in store for the coming week, which again is truncated.

As can be clearly seen Nifty has closed just below a major resistance around 17620. For the next week, the Nifty should face stiff resistance around 17600 and change course of direction. 

On the weekly charts also, Nifty has resistance around the same levels i.e. 17600. The up move in Nifty is likely to be terminated around these levels. A close above 17630 may provide strength to the bulls and open up 17750 on the index.

The Bank Nifty on the other hand has managed to close above all-important resistance of 40800. A break below 40800 may open up move towards 40100 on the Bank Nifty. 41400-41500 remains a profit booking zone for the time being. Bank Nifty is likely to be range bound with a negative bias. 

As always traders should follow levels and adhere to strict risk management rules. Result season is approaching, which may lead to increased volatility and stock specific action. There should be ample opportunity on both sides.

“Conviction is not an happening, but once you go through the process & be convinced, do not compromise it. The rest will also come to your turf eventually.” ~ Sandeep Sahajpal

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 31st March 2023

Dear patrons, financial year 2023 ended on a bright note for the markets. The benchmark indices rose sharply by over 1.5% to close in the green for the month of March. The expiry for the month of March also saw decent up move in the indices on the back of short covering. Nifty managed to end the series with a psychologically important closing above 17000.

The week gone by was slow on the news front. As we mentioned in our previous blog, there was "no news" from the US and it remained "good news" for the markets globally. Almost every major market in the world gained significantly in the last week of March.

Domestically India's forex reserves saw a growth of around $ 6 bn to reach a total of $ 578.78 bn. The forex reserve are showing a rising trend for last couple of weeks and should continue to be positive going forward as India increases its clout in global economy through trade in the Rupee. Also the monthly collection of GST was in excess of Rs. 1.60 lakh crore, second highest since the introduction of GST. India's current account deficit also narrowed to about 2.2% of the GDP, which is likely to narrow further with the launch of new trade policy, providing impetus to exports.

Let's now try to figure out what is in store for us over the next week as far as the markets are concerned. 

As we can see, Nifty managed to take support around 16900 and moved upwards towards 17400. We had clearly mentioned in the last blog about these levels. You can read about it here Weekly Market Update: Week Ending 24th March 2023

We expect the indices to move northwards a bit more. Nifty faces hurdle around 17600 and may not be able to cross it in a hurry. Trend remains "sell on rise". Traders need to be cautious and should not get swayed by the up move. Any up move towards 17600 should be used to book profits and be ready with cash to be deployed in fall.

Bank Nifty also gained impressively last week. Bank Nifty consistently held its head above 39000 paving way for an up move, as we have been suggesting in our blogs. 40800 should act as immediate resistance for Bank Nifty, above which, a move towards 41400 may be visible.

All in all a truncated week should present opportunities on both sides. Traders need to be nimble footed. One should follow levels and adhere to stop losses strictly.

"Anticipate trend and benefit from it. Traders should go against human nature." ~ Rakesh Jhunjhunwala

Stay Invested!!!

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 24th March 2023

Dear patrons, last week was a rollercoaster ride for the markets. The benchmark indices traded in the positive territory till mid-week but lost all ground on the weekly expiry day and the last trading day, markets opened flat and remained negative throughout the session to close down by around 1%.

As we had mentioned in the previous blog, 17200 acted as hurdle on the Nifty. The Nifty lost ground swiftly as is always the case with fall in the markets. Within a couple of sessions markets lost 2% ending the week below the all-important level of 17000.

The US Federal Reserve increased the interest rate by 25 bps during the week paving way for weak US markets. Contrasting statements by the US secretory of treasury, on bank bailout created confusion in the markets. As far as the US is concerned, we can say "no news is good news". Over the last week one of the biggest banks in the world Credit Suisse also announced concerns but was saved by timely take over by UBS. Failure of another bank is no good news for the global economy and concerns of recession are fast becoming a reality.

Moving back home, we have been consistently mentioning that Nifty is in "Sell on Rise" mode and have been correct in our assessment so far. Over the last month, from our mentioned level of resistance i.e. 17800 Nifty has lost close to 1000 points. The pain may persist for some more time. Let's see what is store for the coming week.

We can see Nifty falling on consecutive sessions and breaching the psychological level of 17000. On the daily timeframe Nifty remains in no support zone, meaning it may further slide down swiftly. The only solace one can find on daily charts is that in all probability Nifty has completed its 3rd wave down and may move upwards from 16800-16900 levels.

On the weekly charts also Nifty looks like it has completed its 3rd wave down and may move up towards 17400. The 17400-17600 zone may act as supply zone and profit booking may be seen around these levels.

BankNifty has been following levels mentioned in previous blogs. 39000 as mentioned previously has acted as strong support and BankNifty has consistently managed to close above this level. Resistance for BankNifty appears to be around 40000-40200 levels. Managing to close above 40200 opens the move towards 40800 on the BankNifty.

The markets still remain "Sell On Rise". Traders need to be cautious and adhere to strict stop losses. The coming week being the expiry week and a truncated one, may see jump in volatility and wild moves either side may be visible in the markets. We do believe that we are yet to see the bottom of this corrective phase.

"Srock market is above individuals. The market is rational. An individual can never be smarter than the market" ~ Rakesh Jhunjhunwala

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.