Last week – review
In our last week, we expected range bound movement and our strategy would be to deploy fund on correction and reduce exposure in case of further rally. Indices this week traded in narrow range and weekly change this week was withing 1% or -1%.
Technical Insight
• Nifty RSI @ 58.85 & RSI average @ 62.99. Last up move on Nifty from 17553 to 18458 – almost 1000 points without any major correction. Nifty corrected up to 18113 which is 38.2% retracement level.
• Banknifty RSI @ 66.38 & RSI average @ 66.26. Banknifty last up move from 42582 to 44151 completes double formation requirement of previous top on Banknifty made in Dec-22.
Approach on Technical: Nifty & Banknifty do indicate opposite view. Nifty do indicate range bound move expected with negative bias. Banknifty on the other hand shows strength which could see further build-up.
Our strategy based on technical chart would to turn cautious only after Nifty closed below 18131 & Banknifty below 43181. Indices likely to see selling pressure on rally as Nifty @ 18499 & Banknifty above 44151 could test 44624. Base case assumption for this week would be – Indices likely to test upper end and could see supply at higher level.
Fundamental Insight
1) Rs 2,000 Currency Notes Withdrawn from Circulation, Can Be Exchanged Till Sept. 30
2) Forex Reserves Jump $3.5 Billion To $599.53 Billion
3) RBI To Transfer Rs 87,416 Crore Surplus To Government For FY23
4) S&P Global Reaffirms India’s Sovereign Credit Rating At ‘BBB;’ Outlook Stable
Market View & Strategy
Global market will continue to focus on U.S. debt ceiling talks as deadline is near, latest news from U.S. is that there is no progress on debt ceiling talks. Crisis in U.S. regional banks remain key concern as interest rate remain high.
We are currently invested around 85% and any rally in market could be utilized for reduction. We would wait for healthy correction before we may deploy fresh fund on correction / consolidation. Nifty below 18113 & Banknifty below 43151 could trigger further correction.