Good morning. The last week wasn't as good as it looked. It was better. My take 👆

Good morning

GLOBAL VS LOCAL CUES
US jobs data strong, defies recession fears
US Inflation data this week, 75 bps hike looks done deal
TCS margins disappoint but is it in the price?
FII selling has exhausted, can buy on dips continue?
((SGX Nifty))

TRADE SETUP
Large part of short covering move is now done
Need to see fresh delivery buying now
Broader market has shown very strong signs
From lows: Nifty up 6.8%, Midcap up 10.4%
FIIs have covered more shorts but still 73% short
Aggressive Call writing at 16,200 despite the rally
16,200 Call Open Int was up nearly 55% on Friday
Nifty now faces some congestion in 16,200-16,400 zone
Big question: Can the Nifty move towards 200 DMA of 17,100?
Previous resistance zone of 15,900-16,000 now support
Bank Nifty stronger than Nifty, IT and Reliance remain weak

Let's do it.

GM

A FRESH MACRO RESET?
Dollar Index breaches 108, Euro at parity
US markets showing signs of double top
Has the bear market rally peaked?
((SGX Nifty))

TRADE SETUP
Simple question: Is yesterday’s “Buy on dips” trade valid today?
Bank Nifty and Midcap Index are key to track
This mth: Nifty up 2.7%, Midcap up 5.5%, Bank Nifty up 6.1%
Yesterday’s low of 16,115 will be the first reference point
Nifty now has poor risk-reward on long side
Heavy congestion on Nifty now till close above 16,500-16,661
A close below 16,025 will make bears come back again
Market leadership firmly with ICICI Bank, FMCG names
IT remains weak despite the currency move
FII data indicates short covering move is done
Index futures: FIIs add 7,000 shorts, now at 74% short

Sorry for the delay

As I explained, yesterday was different. Today, there will be more than 1 dip. Also, risk-reward!

GM

WILL OIL PLUNGE SPUR INDIA?
Brent crude slides below $100/bbl
Dollar’s surge leading to commodity meltdown
After TCS, HCL tech also disappoints
Big question: Will mkt make decisive move ahead of US inflation?
((SGX Nifty))

TRADE SETUP
Long Banks, short IT trade may resume again
Nifty IT back within 2% of a 52-week low
Bank Nifty has rallied over 9% from 52-w low
The premise of current rally has been consumption
Market has been factoring easing of inflation in India
Nifty 50 closed very close to a strong support of 16,025
Rally would be vulnerable to be sold into ahead of US data
Aggressive FII selling will make any rally vulnerable
Next expansion only on close above 16,350
Today’s theme will be to sell commodities, buy users
Reliance can be the dark horse for market

I got the Bank Nifty piece wrong today. Apoligies for that

But at higher level, overall selling came which is what was indicated

Good morning

100 BPS: THE NEW NORMAL?
US mkt down but not out even on strong inflation
US bond mkt pricing steep hike now and cut in 2023
Dollar remains strong, trading above 108
Big question: Is the large FII seller back in India?
((SGX Nifty))

FII SELLING IS BACK!
Day FII sell (Rs cr)
Jul 6 330
Jul 7 925
Jul 8 109
Jul 11 170
Jul 12 1566
Jul 13 2840

TRADE SETUP
Reliance + HDFC twins accounted for all of Nifty’s losses
If FII selling picks up, Index rallies will become vulnerable
This month: Nifty gains down to 1%, Midcap up 5.2%
Bank Nifty’s weakness has hurt bulls over last 2 days
Bank Nifty was showing signs of big rally earlier
Weekly expiry today, volatility might be extreme
15,750-15,900 zone represents big support
On upside, this zone had acted as huge resistance
Crude remains below 100, offers respite to India
Buying commodity users on dips is working out