Last week – review
In our technical view we have mentioned our expected target of 18499 which was achieved and Banknifty fell short of our target of Banknifty testing fresh high. Indices manage to hold on to Nifty @ 18131 & Banknifty @ 43181, so we have maintained our bullish view.
Technical Insight
• Nifty RSI @ 67.49 & RSI average @ 63.38. Nifty closing @ 18499 is almost at upper end of the range 18458 / 18498. Nifty closing above 18499 for next 2 trading session can be considered as positive.
• Banknifty RSI @ 64.20 & RSI average @ 63.77. Banknifty underperformed this week and it trading below 44151 its recent top made on 15-May-23.
Approach on Technical: Nifty has outperformed this week closing above 18458 level – recent top. Banknifty underperformed and closed below 44151.
Going into trade on Monday SGX Nifty indicate gap-up opening of around 100 points, Nifty @ 18499 & Banknifty @ 44018 – Friday’s closing to be considered as near-term support level for any long position for next week.
Fundamental Insight
1) Services Sector To Drive GDP Growth To 4.9% In Q4 FY23: ICRA
2) IMD Retains Forecast Of A ‘Normal’ Monsoon In 2023
3) FDI Declines 16% In FY23, First Year-On-Year Contraction In Decade
4) RBI Governor Das Says Won’t Be Surprised If India’s FY23 GDP Growth Exceeds 7%
5) Forex Reserves Drop By $6 Billion To $593.5 Billion
Equichain Wealth – Market View & Strategy
Technically, indices have closed at a level which can be considered as double top and fresh strength from current level could well open upside by next 2% – 3% on indices in next week. As U.S. debt ceiling limit likely to hit by 1st week of June, any disappointing news or failure to finalize debt ceiling deal, market could react sharply lower. We also see probability of profit booking even though deal gets through.
Going into trade this week, we have been invested around 85% in our portfolio and we would prefer to reduce exposure by 5% – 10% on rally and deploy fresh fund only on major decline. If next week market momentum remains positive with positive news flow, we believe market would provide opportunity for stock rotation within portfolio while keeping investment at same level. In F&O segment we may prefer to go long with hedge position as we expect increase in volatility in next week.