Last week – review
In our last week review, upper end of target on Nifty was at 17799 & Banknifty at 41625. Both indices manage to close above this level and major move came on back of US CPI & Core CPI data which came below expectation. India’s CPI data came at 5.66% for March 2023, at 15-months low and below RBI’s tolerance level of 4% (+/- 2) this is range of 2% – 6%.
Technical Insight
• Nifty RSI @ 65.90 & RSI average @ 58.07. Nifty recorded 9 continuous trading days of gains and around 1000 points rally from 16850 to 17840.
• Banknifty RSI @ 68.41 & RSI average @ 58.72. Banknifty rallied from 39325 to 42132 without any major correction with only 10-Apr-23 ended with minor loss. Banknifty rallied around 2800 points in 9 sessions
Approach on Technical: As Nifty closed above 17799 & Banknifty above 41625 – we see technical indicators has given fresh positive break-out. But as Indices have rallied without any major correction or consolidation, any consolidation would be healthy.
Indices has rallied around 5% to 7% from 24-Mar-23 and is now within 5% – 7% of its fresh all-time high. Technical indicate fresh positive uptrend but we expect correction / consolidation in 17th – 21st April 2023 week.
Fundamental Insight
1) CPI Inflation Falls To 15-Month Low Of 5.66% In March
2) India To See ‘Below-Normal’ Monsoon This Year: Skymet Forecast
3) OPEC+ Output Cut May Lead To Higher Oil Prices, Push Up India’s Import Bill: IEA
4) IMF Cuts India’s GDP Growth Forecast To 5.9% For FY24
5) India’s Forex Reserves Rise By $6.30 Billion To $584.75 Billion
Market View & Strategy
We continue to maintain bullish view and as mentioned last week, we have reduced exposure by 8% – 12% as Indices are near our upper end of the range that is Nifty @ 17799 & Banknifty @ 41625.
Strategy for this week would be to focus on stocks which has so far underperformed and has potential for fresh up move, IT to remain weak as TCS & INFY disappoints. Banking stocks going into result with positive expectation could witness profit booking.