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Weekly Reports

18-Mar-23 Technical & Fundamental Insight

Last week – review: Last we have turned cautious as financial crisis triggered by SVB was evolving, last week regulator closed 3 banks – SVB, SILVERGATE BANK & SIGNATURE BANK. Indian IT & Banks were major looser this week. We focused on VIX this week, VIX closed above 16 for 3 days this week and we believe its time to remain cautious.

Financial crisis in US & Europe continues to drag market sentiment which are likely to have impact on upcoming US Fed meeting outcome on 22-Mar-23. ECB hike rate by 50-bps and scrapped future guidance and said future decision will be based on incoming data.

Last week – review

Last we have turned cautious as financial crisis triggered by SVB was evolving, last week regulator closed 3 banks – SVB, SILVERGATE BANK & SIGNATURE BANK.  Indian IT & Banks were major looser this week.  We focused on VIX this week, VIX closed above 16 for 3 days this week and we believe its time to remain cautious.

Approach on Technical: last week we did mention that when news flow leads the market movement, technical take back seat.

Nifty @ 16747 / 16669 & Banknifty @ 37386 / 37247 are likely to be tested on lower side and act as important support level.  

Nifty @ 17546 / 17565 & Banknifty @ 39970 could act as resistance this week.  VIX closed below 16 on Friday, however if VIX moves above 16 next week – its time to turn highly cautious and expect sharp fall as we are heading into important week of trade.

Fundamental Insight

Financial crisis continues to US ‘s regional banks – FIRST REPUBLIC BANK and Europe ‘s Credit Suisse banks was supported by Swiss National Bank of 50 billion Swiss Franc.

• Japan Finance Ministry, BOJ Ready To Respond On Bank Sector Woes
• Goldman Raises US Recession Probability To 35% On Banking Stress
• Turmoil Means ECB Will Finally Set Rates One Meeting At A Time

Market View & Strategy

We see financial crisis could have downside in near term as global news could trigger panic selling in near term.  During next week we could find opportunity to reduce exposure by 5% to 25% based on news flow or could hedge portfolio if find necessary.  

What could be bargain buying level – Nifty @ 16669 & Banknifty @ 37247 are the level we believe are good bargain buying entry level with positional view.  Any speculative position, we would prefer to have complete hedge position as we anticipate highly eventful next week or 2 weeks going into financial year end.

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