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Weekly Reports

28-Jan-23 Technical & Fundamental Insight

Last week – review:

Indian major indices finally manage break-out on lower side on back of ADANI group stocks seen sharp fall on HINDENBURG research report which claim to be biggest con in Indian corporate history.  Adani group had declined their allegations and may explore legal actions against the HINDENBURG research.

Approach on Technical: Indices break-down on lower end of the range was followed by brutal sell-off as ADANI group stocks feared massive sell-off. 

Our strategy for this week will to play for potential short covering on Nifty around 17580 for bounce up to 17775 & Banknifty bounce could be sharp to 41024 & 41597.  We would prefer hedge position only on either side due to Budget & US Fed outcome.

Fundamental Insight

1) India Enters Green Bond Market With $1 Billion Debut Auction.  First Tranche Of Sovereign Green Bonds Sold At A Thin ‘Greenium’
2) India’s Forex Reserves Rise By $1.73 Billion To $573.7 Billion
3) Russian Oil Exports To India May Hit New Highs As Interest Grows
4) India’s Services Exports To Cross $300 Billion Target For This Fiscal, Says Piyush Goyal
5) Worst Of Inflation, Growth And Currency Crises Behind Us: RBI Governor Das

Market View & Strategy

MSCI on Saturday said that it is seeking feedback on ADANI group stocks and that may impact the eligibility of those relevant securities for the MSCI global investable market indexes.

Technical chart has turned weak, so market will face selling pressure on every rise unless there some concrete positive news which could provide fresh trigger to market, budget is key event and we will be watching closely with optimistic view.

We do not have any view on ADANI group stocks, bearish or bullish but this is the first time we have seen more impact on other stocks as market was trading in range for some time and needed a reason for correction.  We do not rule this correction as buying opportunity and we would be going by strategy on Monday & Tuesday and mostly likely avoid fresh positional view on Wednesday that is Budget-day.

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28-Jan-23 Fundamental & Technical Insight.pdf
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21-Jan-23 Technical & Fundamental Insight

Last week – review:

This week started on weak note as indices tested lower end of the range on Nifty around 17775 & Banknifty around 41597.  Indices manage to hold to critical level and also tested upper end of the range where Nifty tested high around 18180 & Banknifty around 42700.  

Major US Banks came with earnings but failed to cheer the market.  US market corrected to weak PPI & Retail sales data, which is trend reversal, earlier weak economic data will have positive impact.

Approach on Technical:  We would wait for clear break-out before taking fresh view, market has been in this range from almost last 3 weeks, consolidation seems to be taking too long, we believe longer the consolidation the move on either side will be sharp & trending.

Nifty above 18202 could open upside to 18547 & 18887.  Nifty below 17775 it could test 17175 & 16733 on lower side.  Banknifty above 42573 could test 43176 & 43723 and below 41597 it could test 41024 & 40048 on lower side.

Fundamental Insight

1) India’s Forex Reserves Zoom By $10.417 Billion To $572 Billion
2) India To Be A $3.7 Trillion Economy In 2023: RBI Article
3) RBI Cautions States Against Reverting To Old Pension Scheme
4) What Are AT1 Bonds And Why They Could Land Yes Bank In Trouble?
5) RBI Tweaks Norms Related To Acquisition For Banks

Market View & Strategy

SGX Nifty is trading at 18127.50 up 53 points as on Friday’s closing trade, reaction to RELIANCE and positive global cues.  ICICIBANK, KOTAKBANK & ULTRACEMCO earnings to be released on Saturday.  On Friday, Banknifty showed some strength on back of HDFC & HDFCBANK taking the lead.  Final F&O expiry for January series is on 25-Jan-23 will play its role ahead of Budget next week on 1-Feb-23.

We remain optimistic till important levels on indices are held, we have maintain this stance for last 3 weeks as market failed to give break-out on either side.  We this week may provide some clarity on Wednesday & Friday.  

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23-Jan-23 Fundamental & Technical Insight.pdf
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7-Jan-23 Technical & Fundamental Insight

Last week – review:

We have turned bullish last week, but market ended the week with around 1.36% to 1.86% cut on major indices.  Correction was trigger following US Economic data which was mix.

US hourly average earnings came below market estimate which triggered rally in US market.  Globally market is volatile but trading in range as market try to find cues on what US Fed next step would be on 1-Feb-23.

Approach on Technical: 

This week view, starts with assumption that Nifty starts 150 points as indicated by SGX Nifty, major and sustainable up move once Nifty sustains above 18202 & Banknifty above 43173.  We have turned bullish last week, we continue to maintain long with review if Nifty goes below 17775 & Banknifty below 41597.

Fundamental Insight

1) India’s GDP growth likely to be at 7% – Frist advance estimate by NSO
2) Retail Auto Sales Fall In December As Two-Wheelers Remain A Drag
3) Domestic Air Passenger Traffic Grows 15% To Around 129 Lakh In Dec. 2022: ICRA
4) Government Keeps General Provident Fund Interest Unchanged At 7.1% In Q4
5) Cabinet Approves Rs 19,744-Crore National Green Hydrogen Mission

Market View & Strategy

Going into trade next week, all IT majors would declare their result starting with TCS on 9-Jan followed by HCLTECH & INFY on 12-Jan and WIPRO on 13-Jan-23.  HDFCBANK result on 14-Jan next Saturday.

Global cues: US Fed chair Jerome Powell speaks on 10-Jan & important US CPI & Core CPI data to be release on 12-Jan. 

We have turned bullish last week and we continue to remain bullish, last 3 days market reaction was on US economic data, that remain critical.  We don’t see major downside in IT stocks unless there is major disappointment.

Last week correction in banking stocks indicate some kind of saturation in credit growth going forward as high interest rate would slowdown, we expect banking stocks to deliver good result which could provide positive momentum, after this week’s correction we remain bullish till some important levels are held.

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7-Jan-23 Fundamental & Technical Insight.pdf
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31-Dec-22 Technical & Fundamental Insight

Last week – review:

Last week market witness free fall on back of COVID fear, Mid-cap 100 & Small-cap 100 was down 5.79% & 8.33% respectively, recovered this week by 4.48% & 5.98% respectively.  We expected market to bounce from lower level after 1 or 2 days of follow through correction, but market manage to hold on to Thursday / Friday ‘s low.  

Approach on Technical: Nifty to trade in range of 18037 to 18462 & Banknifty range seen at 42573 to 44151.

We would remain bullish on Indices with support / review long position on Nifty @ 18037 & Banknifty @ 42573 for target on Nifty @ 18462 & Banknifty @ 44151.  Closing below important support level on Nifty @ 18037 & Banknifty @ 42573 will turn cautious / bearish.

Fundamental Insight

1) Government Raises Most Small Savings Scheme Rates For Q4
2) India’s Fiscal Deficit Widens To 58.9% In First Eight Months
3) India’s Core Sector Sees Modest Growth Of 5.4% In November
4) India’s Forex Reserves Down $691 Million To $562.8 Billion In Second Straight Weekly Fall
5) India’s Current Account Deficit Widens To Record 4.4% Of GDP In Q2 FY23

Market View & Strategy

From next week, US economic data, domestic data such quarterly business updates & Q3FY23 result season to start from 9-Jan-23 onwards as TCS comes out with result will provide further cues.  

In our 17-Dec-22 weekly report – we have said we now turn cautious and in today’s report we believe short correction is over and we are now bullish and will remains so till 15 – 16 December 2022 levels hold.

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31-Dec-22 Fundamental & Technical Insight.pdf
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24-Dec-22 Technical & Fundamental Insight

Last week – review: We were cautious going into trade this week with Nifty @ 18133 & Banknifty @ 42937 could be tested and below this level, market have seen selling accelerated.

Approach on Technical: Sharp correction this week can be termed as free fall or massive sell-off as gap between RSI & its average increased beyond normal level.  Now this free fall could continue for 1 or 2 days more, we expect sharp reversal from oversold zone.

Indices are trading below its normal logical support level, Nifty below 18133 could test 17667 & 16912.  Banknifty below 42937 has seen sharp fall which could test lower level up to 40819 in case of worst case.  Nifty @ 17667 & Banknifty @ 41245 / 40819 critical support.


Fundamental Insight

PMGKAY: Pandemic-Era Food Scheme Ends, Subsidized Grains For Poor Now Free
China Estimates Covid Surge Is Infecting 37 Million People A Day
MPC Minutes: Members In A Tug Of War Over An Early Pause
India’s Forex Reserves Decline $571 Million To $563.5 Billion
Surplus Tax Revenue To Keep Expenditure Bill In Check In FY23, Say Economists

Market View & Strategy

We believe, recent fall on Thursday Friday may be over reaction to this news and it would rather provide opportunity to add fresh at current level with view of Budget + 2023-year end view.

We believe, recent sell-off does show panic selling could be overdone but we would also be watchful to market behavior.  Near term movement will all be about these factors as we see there is no major change as per company fundamentals in concern.

1) F&O expiry for December series, 
2) Technical indicate oversold zone, 
3) Expectation of year-end rally as we go in trade for last week of 2022.  

Historically, buying any sharp fall have yielded positive return with a holding period of 6 to 12 months.  Nifty around 16900 & Banknifty around 39700 would provide such entry opportunity if panic selling continues in last week of 2022.

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24-Dec-22 Fundamental & Technical Insight.pdf
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17-Dec-22 Technical & Fundamental Insight

Last week – review: Last week we change our stance to cautious from bullish, awaiting further clarity from US Fed meeting outcome.  Technical setup which was indicating in overbought zone, reacted to downward move along the expected line.

Approach on Technical: Nifty @ 18133 & Banknifty @ 42997 / 42937 could test and take support and will face resistance on Nifty @ 18599 & Banknifty @ 43584.  

Fundamental Insight

US Fed increase rate by 50-bps to 4.25% – 4.50% – In line with market expectation.
Median forecast for 2023 raised to 5.1% up 50-bps from September 2022 meeting.
ECB President Lagarde: “We have more ground to cover, we have longer to go and we are in for a long game.”
BOE MPC repeats willingness to act forcefully if needed.

Oil Drops as Mounting Recession Fears Weigh On Risky Assets

India’s Forex Reserves Swell By $2.91 Billion To $564.1 Billion

RBI Fortnightly data as on 2-Dec-22

• Credit growth continues to remain robust – credit growth @ 17.5%
• Deposit growth rate increased to 9.9%

Last week we change our view from bullish to cautious.  We continue to maintain our stance and remain cautious.  Next 2 weeks market could be in holiday mood or see profit booking as recession fear weighs on market which could trigger profit booking by FII & Institutional selling.

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17-Dec-22 Fundamental & Technical Insight.pdf
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10-Dec-22 Technical & Fundamental Insight

Last week – review: Nifty tested lower end of the range at 18421 but Banknifty outperformed.  RBI MPC policy & election result were inline with market expectation with no surprises.  

Approach on Technical: Nifty indicates weakness on chart while Banknifty is showing strength and RSI of Banknifty is above 70 which could potentially trigger short covering.

Nifty & Banknifty technical indicator are showing opposite trend, we would wait for either Nifty to show positive momentum and move above 18600 level with 18421 to act as review for long position or Banknifty to turn negative and move below 43317 & 42996 which could test 42157 on lower end of the range.

Market View & Strategy

This week our approach is very clear, any addition in fresh long with a positional view would be after the US Fed meeting outcome and initial reaction to market is done by 15-Dec-22.  

This week we are changing our bullish view to cautious and will take fresh view after US Fed meeting outcome.  Banknifty made fresh high and valuation are near to peak.

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10-Dec-22 Fundamental & Technical Insight.pdf
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3-Dec-22 Technical & Fundamental Insight

Last week – review

Indian market was flat to around 1% up and also traded in narrow range.  Banknifty underperformed as IT & Metal stocks outperformed as we expected, easy monitory policy to help these sectors.

Approach on Technical: Currently indices are technical uptrend above 18442 & Banknifty above 42730 – which has potential upside of 6% to 9% over a period of 3 – 5 weeks.

This week is expected to be volatile where Indices could take cues from event outcome of RBI MPC decision on 7-Dec-22 & Gujarat election on 8-Dec-22.  Nifty range 18421 – 18887 & Banknifty range 42517 – 42996.  

Any correction on indices at lower end of the range could be utilize for fresh entry opportunity.

Fundamental Insight

1) India’s FY23 Q2 GDP Grows 6.3%; GVA Expands 5.6%
2) India’s Fiscal Deficit Till October At 45% Of Full-Year Target
3) Deregulate Natural Gas Pricing By 2027, Bring It Under GST: Kirit Parikh Committee Report
4) GST Collections Stay Above Rs 1.4 Lakh Crore For Ninth Straight Month

Market View & Strategy

This week will be eventful as market will be reacting to exit poll of Gujarat & Himachal Pradesh election, RBI MPC meeting on 7-Dec-22 and election result on 8-Dec-22.

This week will be eventful as market will be reacting to exit poll of Gujarat & Himachal Pradesh election, RBI MPC meeting on 7-Dec-22 and election result on 8-Dec-22.

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3-Dec-22 Fundamental & Technical Insight.pdf
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26-Nov-22 – Technical & Fundamental Insight

Last week – review

Market went into trade this week, with facing supply at higher level, but market turned positive post US Fed meeting minutes.  We had clear view to go long and, on any correction, we had mentioned to add fresh long around key support level.  

Approach on Technical: Technical breakout will open further upside 6% – 9%.  Over a period of 3 to 5 weeks.  Outlook for December end looks interesting.

This week outlook remains sideways with little pull-back or correction would be healthy.  Nifty @ 18436 & 18175 & Banknifty around 42300 – 42400 could provide good entry opportunity for long.  Technical setup is bullish and our strategy to trade long.

Market View & Strategy

Global cues will continue to drive the narrative which is currently building around the slowdown in rate hike by US Fed.  Major economic data from US starts from 2-Dec-22 and any change in global narrative could lead to further correction.  Easy monitory policy means mid-cap & Small-cap could do well and we are bullish on Mid-cap & Small-cap with short term view till budget.  

We would focus on IT & Metal as a sector which could do well during easy monitory policy.   We see 1st half of December to very eventful and interesting which could set the stage for some consolidation this week.

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26-Nov-22 Fundamental & Technical Insight.pdf
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01-Oct-22 Technical & Fundamental Insight

Last week – review:

We went into trading with weak global cues, weak technical set up and F&O expiry.  We expected bounce back earlier before September series expiry, but momentum failed even on Thursday, when market was down after positive opening.

Approach on Technical: Technical set up continue to remain weak, even after Friday’s bounce, Indices breaking lower end of the range could open further downside, Nifty below 16591 & Banknifty below 37386 – we would turn bearish on market.  

This week also, we will continue to focus on VIX and break up or down from current trading rage.

1) VIX stays above 20 & see some bounce on Nifty @ 17166 & Banknifty @ 39432: We will consider it as opportunity to reduce exposure & find short opportunity.

2) VIX goes below 20 level & Nifty @ 17166 & Banknifty @ 39432 breaks above: if market stops further correction and holds on to crucial level, consolidation in range on Indices within 2% percent will mean that market will be waiting for further cues & development, which will be corporate earnings.

3) VIX stays above 20 & correction continues: Current momentum is down and market is getting hammered into with fresh weakness and we would prefer to hedge & reduce exposure.

Market View & Strategy

RBI Governor in its opening speech mentioned recent tight monitory policy as “Third Storm” and have considered it while forming interest policy.  We believe it is soft signal of things may get worse before interest peak-off.  

Market going into these quarterly earnings as on 30-Sep-22 with heightened fear as tight monitory policy can continue to overshadow good corporate earnings.  Any weak corporate earnings would be very critical and bearish.

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1-Oct-22 Fundamental & Technical Insight.pdf
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