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.

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.