Last week – review
We went into trade in this week expecting momentum build-up as there was US Fed, ECB & BOJ central bank’s meeting. After RBI’s meeting last week, indices failed to gained momentum as supply seen from higher level. Mid-cap & Small-cap continues its upward momentum as defense stocks rallies.
Technical Insight
• Nifty RSI @ 67.18 & RSI average @ 64.90. Nifty after consolidation this week continues its upward momentum with highest closing at 18826.
• Banknifty RSI @ 53.53 & RSI average @ 54.94. Banknifty is currently underperforming Nifty. Last week RBI meeting & this week, US Fed, ECB & BOJ continues to weight on Banknifty.
Going into trade this week, Nifty support level @ 18503 & Banknifty support level at 43552 will re critical. Indices continue to indicate mix view with upside target on Nifty @ 18965 & Banknifty @ 44959. As we have seen in last 2 weeks, indices remain in narrow range, we could again see this week indices trade in narrow range, we would be watching VIX closely for any change in view on increase in volatility.
Fundamental Insight
1) India’s Trade Deficit Widens To $22.1 Billion In May
2) Government Lines Up Two Tranches Of Sovereign Gold Bonds In First Half Of FY24
3) Housing Prices Rise in Top Indian Cities, Delhi Sees Highest Spike
Equichain Wealth: Market View & Strategy
Major events such as RBI MPC meeting in previous week, US Fed, ECB & BOJ meeting outcome concluded in week just concluded, outcome was mostly in-line with market expectation. Globally market is trading near their respective high, marking 2023 with positive return after flat or negative 2022.
Our strategy this week to remain invested around 80% – 85% and any rally to be used to reduce exposure and fresh deployment of fund to be done on major correction. Meanwhile if market continue to trade in range, stock rotation with limit of 85% could be preferred.