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Weekly Reports

16-Dec-23 Technical & Fundamental Insight

Last week – review

Going into trade this week after sharp rally seen in previous week on back of state election result – we were cautiously optimistic.  We did not expect US Fed meeting outcome to trigger fresh round of rally as decision by US Fed to pivot was positive surprise.  IT, Banks / NBFC & Metals are clear winners of low interest rate globally.

Technical Insight

• Nifty recent run-up is vertical rally which warrants some cautious.  Nifty on upside is in unchartered territory could continue momentum & on lower side Nifty @ 20809 can be seen as key support level.
• Banknifty key retracement level at 38.2% comes at 46316 which is around 1800 points from this level.  

Approach on Technical: We will consider technical chart with a view that there was two back-to-back positive events / weeks, first was state election result and seconds was US Fed dovish commentary. 

Nifty rally from 19703 to 21492 is seen without any major correction / consolidation, retracement level on Nifty comes at 20809 (38.2%) & 20389 (61.8%) and retracement level on Banknifty comes at 46314 (38.2%) & 45136 (61.8%) of rally from 43231 to 48219.  We will not add fresh long at current level and wait for correction / consolidation.

Fundamental Insight

1) Net Direct Tax Collection At Rs 10.64 Lakh Crore In April-November
2) Trade Deficit Narrows In November As Imports Fall
3) Rupee Hits Three-Month High As RBI Eases Dollar Buying On Fed Signal, FII Flows

Equichain Wealth Advisors: Market View & Strategy

In a previous week, Indian market had rallied due to domestic reason – state election result declared on 3-Dec-23 which was seen as important ahead of general election next year.  Both this factor has turned positive and when we take Top-down approach, both the recent events can provide at least 5% to 10% premium which market has already rallied.

For next two weeks, we would continue to keep exposure around 80% level and deploy remaining fund only in case of there is 5% correction or stock specific approach with upper limit of 85% for next two weeks.   We will continue to sit tight with 80% allocation in positional portfolio and may reduce exposure by further 10% in trading portfolio bringing exposure in trading portfolio to around 70%.

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9-Dec-23 Technical & Fundamental Insight

Last week – review

Going trade last week, we kept our focus on technical and market internal and we remain bullish.  But the biggest surprise came from state election result declared on 3-Dec-23 where BJP got massive mandate in 3 states, MP, Rajasthan & Chhattisgarh – Market took this election with big positive move on Monday and followed by weekly gains of above 3% on Nifty & SENSEX and Banknifty gained over 5% this week.  

Technical Insight

• Nifty likely to see sideways consolidation and 20698 & 20508 will act as important support level.  Nifty upward momentum continues to remain strong.

• Banknifty, consolidation from current level could be considered as healthy.  Banknifty key support level on downside comes at 45702 & upsides remains open.

Approach on Technical: Monday, 4-Dec-23 move was surprise and it has changed the narrative & chart pattern in near term.  Technical setup needs to adjust to new reality and premium after Monday’s move.

Our strategy for next would be to wait for confirm negative divergence or negative signal before we book further profit or hedge.  Nifty @ 20508 & Banknifty @ 45702 are two important level to watch incase of any correction.  These levels are current 2% to 2.5% from current level.  Any Fresh long position would be preferred around this level.  Momentum on indices remain strong and we would avoid fresh long as we see trend reversal from current level.

Fundamental Insight

RBI Monetary Policy Highlights: Repo Rate Unchanged At 6.5%, Raises GDP Growth Forecast To 7%

Following the review, the MPC decided:

• To keep the repo rate unchanged at 6.5% unanimously. 
• The standing deposit facility rate, pegged 25 basis points below the repo rate, is at 6.25%. 
• The marginal standing facility rate, which is 25 basis points above the repo rate, is at 6.75%. 

The committee had raised the benchmark repo rate by 250 basis points in the last cycle before opting for a pause starting in April’s meet this year.

Taking into account these factors, CPI inflation is projected at 5.4% for 2023-24, Q3 at 5.6% and Q4 at 5.2%, with risks evenly balanced. Assuming a normal monsoon next year, CPI inflation for Q1:2024-25 is projected at 5.2%; Q2 at 4.0%; and Q3 at 4.7%. The risks are evenly balanced. 

Shaktikanta Das, Governor, RBI

Equichain Wealth Advisors: Market View & Strategy

We would continue to remain bullish on market with a medium-term view, but in short term after recent run-up, we may utilize this rally to book part profit and reshuffle portfolio as we appropriate opportunity.  Momentum remains strong but technical indicates that market is in over-bought zone.  Market from current level would consolidate sideways or correct from current level.  We would wait for correction to initiate fresh buys.

This state election result was seen as semi-final ahead of general election.  Market reaction to this result was positive and market is now trading at premium as we see at least 5% premium is seen as far as overall market is concern.  

We have turned our view bullish on IT stocks ahead of US Fed meeting outcome on 13-Dec-23 and TCS buy-back acceptance announcement this week.  IT in recent times have underperformed and any positive trigger could trigger positive reaction in IT stocks.

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2-Dec-23 Technical & Fundamental Insight

Last week – review

Going into trade this week we did mention that positive break out could trigger rally of 2% on indices and all major indices are up by more than 2% and Nifty touched fresh life-time high once critical resistance level were crossed.  Rally this week was supported by India’s Q2 GDP numbers which came at 7.6% above estimate, led to rally in infra stocks.

Technical Insight

• Nifty in unchartered territory will further upside to 20525 & above on higher side and key support on nifty for next week could be 19948 & 19736.

• Banknifty upside target for next week could be 45410 & 46310 and support level comes at 43711 on weekly basis.  On Friday, 8-Dec-23 RBI MPC policy – we are expecting volatile session.

Approach on Technical: We consider this week’s closing as positive technical breakout received earlier this week and we see positive trend to continue in coming few weeks, consolidation in first few trading day could be healthy before next up move.

Nifty made fresh life-time high and is currently in unchartered territory, Nifty could test 20525 & 20689 & support level comes at 19948 & 19736.  Banknifty could attempt to outperform in coming weeks as RBI MPC Meeting on 8-Dec-23 could give decisive direction.  Banknifty @ 44207 & 43711 to act as support level while Banknifty could test 45410 & 46310 on upside.  

Fundamental Insight

1) India’s Q2 GDP Grows 7.6% Surpassing Estimates As Manufacturing Spikes
2) Core Industries Grow 12.1% In October Driven By Four Key Sectors
3) Bank Lending To Private Corporate Rises 14.9% In September: RBI Data
4) GST Collections Jump 15% To Rs 1.67 Lakh Crore In November

Equichain Wealth Advisors: Market View & Strategy

Market firing on all cylinders, we expect positive momentum to continue in coming weeks as market will test the sentiment of pause of interest rate hike.  Recent rally may be a good case of – rally on expectation and profit booking on actual news.  We do see further rally run-up to RBI MPC meeting on 8-Dec-23 and US Fed meeting on13-Dec-23 and market could then consolidate or witness profit booking.  

To conclude today’s report – Nifty around 20600 – 20800 & Banknifty around 46000 – 46500 would be good level to book profit around 2nd week of December if comes before the event or post event.  Any correction / consolidation in first few trading days of next week to be considered as buying opportunity ahead key event later this week and next week.

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2-Sep-23 Technical & Fundamental Insight

Last week – review

If Friday’s up move is not considered, indices were flat for this week and continue to trade in narrow range, we expected decisive move but market continue to trade in range as market seen selling pressure on Wednesday & Thursday due to F&O expiry.  Friday’s move came on back of light position carry forward to September series in 2nd half.

Technical Insight

• Nifty range for this week seen as 19319 to 19674.  Nifty likely to cross 19478 and test 19674 on upside while Nifty below 19319 could be seen as weakness and further downside possible.

• Banknifty range for this week 44030 to 45219.  Banknifty above 44578 could see fresh round of up move which could test 45219.

Approach on Technical: Technical continue to remain in range with no clear break-out in either direction.  We continue to expect break-out in next week as F&O expiry for August series is over.

Nifty range for this week seen at 19319 to 19674 & Banknifty range for this week seen at 44030 to 45219.  Nifty above 19478 & Banknifty above 44578 could be seen as fresh round of up move which could test upper range on Nifty @ 19674 & Banknifty @ 45219.

Fundamental Insight

1) Manufacturing PMI Rises To Three-Month High Of 58.6 In August
2) India Sees Russian Oil Ebbing As Rival Suppliers Step Up
3) Economy & Finance El Nino, Food Inflation To Delay RBI’s Easing Of Monetary Policy: Moody’s 

Equichain Wealth Advisors: Market View & Strategy

F&O expiry for August series has flat to negative after 4 months gain from March 2023.  F&O position remain light going into September series as market has seen rally on 1st day of September month & F&O series.

Meanwhile India continues to remain in its own zone of high domestic consumption.  RBI continue to remain vigilant as El-Nino could impact food inflation in near term and RBI may keep interest rate high going into festive season.

We have turned bullish and kept our investment unchanged for this week, our view remains bullish and continue to focus on deployment of fund which is available.  We expect September month to remain positive after consolidation seen in current month.

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12-Aug-23 Technical & Fundamental Insight

Last week – review

Indices this week ended with cut of under 1% on major indices and Banknifty loss by 1.52%.  RBI MPC meeting outcome on 10-Aug-23 – RBI kept repo rate unchanged at 6.50% and continue its stance of “Withdrawal of Accommodation” with 5:1.  Indices seen consolidating for 2nd straight week.  

Technical Insight

• Nifty on daily chart indicate further weakness.  Nifty @ 19160 could act as key support level and Nifty below 19160 could test 18646.

• Banknifty RSI & RSI average indicate further weakness.  Banknifty could test 43541 and further downside possible.

Approach on Technical: Indices on daily chart are seeing some kind of weakness, further consolidation seems likely in the month of August 2023.

Nifty range of this week looks like 19160 to 19674, Nifty below 19160 could indicate further weakness towards 18646.  Nifty above 19674 could be considered as trend reversal as bullish.  Banknifty closed below 44578 could test 43541 level this week.

Fundamental Insight

1) Bank Credit Growth to MSMEs Decelerates in June Quarter: RBI Data
2) Cabinet Approves Rs 1.39-Lakh Crore Plan For Rural Broadband
3) SBI Seeks Buyers For Its Rs 96,000 Crore Bad Loans
4) Credit Card Default Rises To Rs 4,072 Crore In FY23

Equichain Wealth Advisors: Market View & Strategy

Global cues continue to remain mix as market consolidated this week.  With Q1FY24 result near to its end, we see further consolidation and correction from current level would be healthy after market rally seen since last April 2023.

We see current rally as opportunity to reduce exposure and keep exposure around 70% to 85%.  After recent run-up seen in pharma stocks, some sign of fatigue seen.

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5-Aug-23 Technical & Fundamental Insight

Last week – review

We expected some correction / consolidation before market makes its next move, Nifty tested 19458 but was trading above 19160 & Banknifty tested 61.8% retracement level of 43541 to 46256 rally.  Indian market remain mix with Banknifty correct by 1.29% as high interest rate would be major concern.

Technical Insight

• Nifty continue to remain in correction / consolidation zone with 19160 to act as decisive support level this week & break-out above 19678 to act as fresh trigger.

• Banknifty took support at 61.8% retracement level of 43541 to 46256.  Banknifty close below 44578 could open further weakness & above 45219 Banknifty could expect another round of rally.

Approach on Technical: Technical trend continue remain mix and no clear direction in short term while medium term trend remains positive.

Nifty @ 19160 & Banknifty @ 44578 & 44138 to act as critical support level.  Indices would turn negative only if this support level are broken on closing basis and uptrend could resume once Nifty goes above 19674 & Banknifty above 45615.

Fundamental Insight

1) Forex Reserves Drop By $3 Billion To $603.87 Billion
2) India’s Unemployment Rate Falls in July Due to Farm Demand
3) Banks Spend More In Q1 As Employee Costs Continue To Mount

Equichain Wealth: Market View & Strategy

This week focus would shift to RBI MPC meeting outcome on 10-Aug-23.  Most private banks came out with Q1FY24 result in-line or better than street estimate but SBIN seen some increase in slippages to 7659 crores from 3185 crores, quarter ago.  RBI has kept rate unchanged in last two policy meeting and is expected to maintain status quo.  RBI Governor commentary and guidance on future action will provide fresh set of triggers.  Q1FY24 earnings season in last phase as PSU & defense PSU stocks will be in focus.

We would continue to focus on capital allocation strategy which is currently around 70% to 85% with allocation in defensive stocks around 15%.  Any major correction would provide us opportunity to deploy fund which is already available.  In case of sharp up move, we would prefer to keep exposure at same level and look for rotation of stocks within exposure limit.

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Daily Reports

Daily Report 1-Aug-23

Wall Street was marginally positive as oil stocks help market gain while health care stocks struggle, big tech stocks such as APPLE & AMAZON remain in focus ahead of its earnings later this week.

Domestic natural gas prices were raised from Aug. 1, 2023, to Aug. 30, 2023. Domestic natural gas prices were raised to $7.85/mmBtu from $7.48/mmBtu. The price of gas from ONGC and OIL nomination fields will have a ceiling of $6.50/mmBtu on a gross calorific value basis.

WTI Crude above $80 & Brent Crude above $85.  Metal price remain strong on hope of China’s stimulus package.

F&O data: FII continue to reduce long position in index futures, net short by 8147 contracts in index futures on Monday.  Net long position now stands at 51.46%.

Approach on Indices: Nifty likely to test 19835 & Banknifty likely to test 45835, indices above this level could open further upside and support remain on Nifty @ 19478 & Banknifty @ 45219.

GIFT NIFTY @ 19883 Vs 19844 Nifty future previous close.


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Daily Report 31-Jul-23

Wall Steet had another positive session with NASDAQ gain by 1.90% as tech stocks did well.  DOW30 was up by 0.50% & S&P500 was up by 0.99%.

China Seeks to Boost Consumption to Spur Economy’s Recovery – China’s economic data continues to remain weak as Chinese government continue to focus on economic revival since beginning of 2023.

Metal & Chemical stocks will be focus as China’s is expected to announce fresh set of measures to boost economy.

F&O Data: FII net long position in index futures by 13814 contracts, FII reduced 19427 contracts in index futures.  Nifty PCR @ 0.82 Vs 0.90 & Banknifty PCR @ 0.74 Vs 0.70.

Approach on Indices: Nifty @ 19478 & Banknifty @ 45219 could act as important support level and indices remain in uptrend till these levels hold.

Market View: We would focus on Metal stocks, Defense stocks for fresh allocation.  PSU’s where Q1FY24 earnings is pending could provide fresh entry opportunity.

GIFT NIFTY @ 19785 Vs 19751 Nifty future pre close.

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29-Jul-23 Technical & Fundamental Insight

Last week – review

Market started this week with cues from RELIANCE, KOTAKBANK & ICICBANK result.  Technical setup does indicate some pause and market this week after brief consolidation have seen correction. Market corrected on Thursday & Friday making indices to close with minor loss on weekly basis.

Technical Insight

• Nifty rally from 18646 to 19991, retracement @ 38.2% comes @ 19478 & 61.8% comes at 19160.  Nifty below 19478 could test 19160 level and Nifty above 19861 could resume fresh uptrend.

• Banknifty rally from 43541 to 46256, retracement @ 38.2% at 45219 was tested on Friday, further correction could test 44578.  Banknifty above 45841 could resume positive trend.

Approach on Technical: Indices after all most 16% -18% rally in last 3 – 4 months is showing some sign of weakness on charts.  Indices have witness sideways consolidation during this rally and we may continue to see that trend.

Nifty @ 19478 & Banknifty @ 45219 are 38.2% retracement level of their recent rally.  Any weakness could trigger correction up to 61.8% retracement level on Nifty @ 19160 & Banknifty @ 44578.  We assume that uptrend will resume once Nifty @ 19841 & Banknifty @ 45927 is crossed.

Fundamental Insight

1) India GDP To Grow 6-6.3% In FY24, Economic Prospects Brighten: Deloitte India
2) Surging India Prices May Keep RBI on Extended Pause, IMA Says
3) IMF Raises India’s GDP Forecast To 6.1% For FY24

Equichain Wealth Advisors: Market View & Strategy

During the last few weeks, we have maintained our strategy to participate in this rally with keeping exposure around 70% to 85% and some allocation towards defensives.  We would prefer stock rotation while keeping exposure at same level and we continue to maintain our strategy.  This week we would focus on defense stocks, telecom & PSU where result is awaited.  Any correction would provide fresh view on market to deploy fund available with us. 

Buying keeping allocation at 70% – 85% in last few weeks, we have managed to perform in-line with index and any we would deploy fresh fund on correction as we believe market will continue to correct and have stock specific approach.

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Daily Report 21-Jul-23

Wall Street: TESLA & NETFLIX was down after result, NASDAQ & S&P500 ended down by 2.05% & 0.68% respectively.  DOW30 ended in green with 0.47% gains.

INFY Q1FY24 result in-line with estimate, revised revenue guidance downward to 1% – 3.5% from earlier 4% – 7%.  INFY ADR down by 8.5% overnight, expect to open with deep cuts.

RELIANCE will come out the result today.  LT result on 25-Jul-23 will consider Buy-back and special dividend and record date for same will be 2-Aug-23.

F&O data: FII added 11091 contracts in index futures, net long position for FII is now above 1 lakh contracts in index futures, net long position now stands at 70.68%.

Approach on Indices: GIFT Nifty indicate down opening due to INFY & other IT stocks could remain under pressure, Nifty @ 19697 & Banknifty @ 45110 could act as support level in case of any correction.  Banknifty will continue to outperform.

GIFT NIFTY @ 19880 Vs 19967 Nifty future previous close at 8:05 AM

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