Can nifty hit 4 lakh in next 20 years?

Lupin: what next?

GM

CURRENT MARKET: ONE TYRE PUNCTURED
Indian market has 4 big sectors: Banks, IT, Reliance and FMCG
Currently, Banking is not moving, other sectors ok
Pharma is like the spare tyre for the car, doing well
Yesterday, Nifty ended at highs and Bank Nifty at low
Fin Nifty expiry today, Banking underperformance may continue
Best trade right now is in IT and Pharma, buy on all dips

BANK NIFTY: WHAT’S THE PROBLEM?
HDFC Bank in focus today, biggest component of Index
FTSE to increase weight in 3 tranches instead of 1
Banking stocks have underperformed due to 4 reasons
1) Much more decline in NIMs than expected
2) Clear signs of slowdown in credit growth
3) Asset quality deterioration
4) Valuations slightly demanding now
Avoid Bank Nifty trade till clarity emerges
RBI monetary policy this week, direction may emerge on Thursday
No long trade in Bank Nifty till it closes above 45,200
Too late to take a big short trade in Bank Nifty now

NIFTY OUTLOOK
Date High Low
Aug 3 19537 19296
Aug 4 19538 19436
Aug 7 19620 19524

Nifty has now made higher high and higher low for 2 days
Nifty yesterday closed above 20 DEMA and at 10 DEMA
First resistance: 19,600-19,620 (10 DEMA and yesterday’s high)
Bigger resistance: 19,680 (Options based)
If 19,680 is crossed, a sharp move to 19,795 is possible
First support: 19524-19,538 (Yesterday low and 20 DEMA)
Bigger support: 19,436-19,296 (previous swing lows)
Buy zone for today: 19,550-19,600
Add zone for today: 19,525-19,550
Strict stop loss for long trades: 19,500
Will look at short trade only if market weakens below 19,500
 

BANK NIFTY OUTLOOK
Date High Low
Aug 3 45038 44279
Aug 4 45118 44520
Aug 7 45011 44773

Bank Nifty making higher lows but highs are same
45,000-45,200 is very strong resistance for Bank Nifty
10 and 20 DEMA for Bank Nifty also placed around 45,150
Trade on Bank Nifty: Sell in 44,900-45,050 zone
Stop loss for all trades on Bank Nifty: 45,166
Buy trade only on strength above 45,166, stop loss: 45,011
Can also buy Bank Nifty on dips around 44,600-44,700
Stop loss for this buy trade: 44,550 (Around 50 DEMA)

GM

MARKET: DON’T LOOK AT INDEX
Nifty and Bank Nifty within first resistance and first support yesterday
Midcap Index hit fresh high, Adv/dec even
Midcap 100, Midcap 150, Microcap, Small Cap all at new highs
269 BSE stocks at new highs, only 28 at new low
Index has gone through a time correction till now
Nifty is just 2% away from life high, Bank Nifty 3%
Time correction has allowed moving averages to catch up
Nifty is now below 20 DMA, but much above 50 DMA
Bank Nifty now below 20 DMA, only sightly above 50 DMA
Index likely to give a direction post RBI policy

MARKET: WHAT NEXT?
Market is battling consistent FII selling
FIIs have sold on each day of the August series
Net selling of Rs 7,500 cr since July expiry day
Big question: What is leading to sudden FII outflow?
The main reason for selling is slowdown in market momentum
ETF money normally follows momentum
Lot of money has moved back to the US market
FII inflows will be back if Nifty hits new high again
Earnings season getting over, market needs a fresh trigger
Next big talking point will be the big state elections

NIFTY OUTLOOK
Date High Low
Aug 3 19537 19296
Aug 4 19538 19436
Aug 7 19620 19524
Aug 8 19634 19533

Nifty again made higher high and higher low
For 3 days, Nifty has made higher high and low
First support: 19,533 (Yesterday’s low and 20 DEMA)
Bigger support: 19,500 (options based)
Buy zone: 19,525-19,575, stop loss: 19,500
If Nifty starts to break 19,500, get short on Index
First resistance: 19,634 (yesterday’s high)
Bigger resistance: 19,680 (options based)
Above 19,680, a sharp move to 19,800 is possible
If Nifty crosses 19,680, chase via Calls for big move

BANK NIFTY OUTLOOK
Date High Low
Aug 3 45038 44279
Aug 4 45118 44520
Aug 7 45011 44773
Aug 8 45096 44817
For 3 days, Bank Nifty high same but low is higher
Bank Nifty is showing signs of ending the underperformance
ICICI Bank and SBI ended at day high yesterday
If HDFC Bank can join in, Bank Nifty can see rally
Bank Nifty will rally only if it settles above 45,200
Go long on Bank Nifty above 45,200, stop: first hour low
If 45,100 is rejected, go short with stop loss of 45,200
At lower levels, buy Bank Nifty in 44700-44800 band
Stop loss for this long trade: 44,600

GM

INDEX: IN A NO TRADE ZONE
Don’t buy at 19,650, don’t sell around 19,500
Traders need to smartly play 19500-19650 range
Big trade will happen on close above 19680 or below 19450
Lot of events today, RBI policy and weekly options expiry big ones
US inflation data tonight, India will react tomorrow
No problem in broader markets, better to focus on stocks
Whenever Index trade comes, it will be a big one

MARKET: WHAT’S AILING THE INDEX?
Market worried about India and US inflation
Most Asian markets worried more Fed hikes ahead
Brent crude is showing signs of heading back to $90/bbl
RBI policy today, the Governor may have to sound hawkish
Unwinding of Yen Carry trade has led to some outflows
Most large banking names seeing selling on every rally
Big state elections lined up, mkt worried about freebies

NIFTY OUTLOOK
ABSOLUTELY no trade before the policy
Will take a fresh view after policy is digested
Compulsive traders follow levels, do small qty
First support: 19,525-19,550 (20 DEMA zone)
Big support: 19,467 (yesterday’s low)
First resistance: 19,640
Bigger resistance: 19,680
Sell after gap down, stop loss of 19,600
Book profit in short trade at 19,450-19,500
Long trade only if Nifty saves 19,467 and bounces back
Stop loss for all long trades: 19,450

BANK NIFTY OUTLOOK
ABSOLUTELY no trade before the policy
Will take a fresh view after policy is digested
Compulsive traders follow levels, do small qty
Bank Nifty has no long trade before policy
Bank Nifty’s texture remains sell on rally
Bank Nifty long only above 45,200, on strength
First support: 44,533 (Yesterday’s low)
Bigger support: 44,450 (options based)
Below 44,000, Bank Nifty can fall to 43,940 (100 DEMA)
If policy is not hawkish, Bank Nifty can see big short covering

Short trade has worked. Had adjusted stop to day high after first 15 mins.

Now need to see if 19,450-19,500 holds or not.

Good morning

MARKET: TESTING PATIENCE
Nifty has only fallen 2.8% but almost 1 month of time correction
Peak of 19,991 was made on July 20th
Next level to watch: 50 DMA of 19,240
Bank Nifty is the problem, down almost 5% from peak
Possible that Bank Nifty could now test 200 DMA of 42,750 also
No problem in broader market as of now
Nifty is lacking leadership from big stocks
All big stocks have corrected at least 5%
ICICI Bank down 5.5%, HDFC Bk down 8% from peak
Reliance down over 7% from peak adjusted for JFS

NIFTY OUTLOOK
Market’s near-term texture is “Sell on rally”
First support: 19,350 (options based)
Bigger support: 19,240 (50 DMA)
First resistance: 19,535-19,550 (20 DEMA, Friday high)
Bigger resistance: 19,680
All rallies should be sold till 19,550 is reclaimed
Sell zone for today: 19,400-19,500, stop loss: 19,550
Profit taking zone for sell trades: 19,250-19,300
Buy trade only on strength above 19,500

BANK NIFTY OUTLOOK
Fin Nifty expiry today due to holiday tomorrow
Fin Nifty’s expiry has been negative for last 4 weeks
Bank Nifty is the weakest component of the market right now
Bank Nifty’s PCR at 0.61, extremely oversold
Only hope for Bank Nifty is short covering
Next support levels: 43,526-43,967 (100 DMA and 100 DEMA)
Sell on failure of rally with hourly high as the stop loss

Good morning

THE INFLATION GHOST IS BACK!
July CPI @ 7.44% vs poll of 6.6% & June CPI of 4.8%
Veggies up 38% over June, contribute 2.3% of the 2.6% rise
Positive - Core CPI falls to 4.9% vs poll of 5%
Economists see Q2 CPI at 6.8% vs RBI forecast of 6.2%
FY24 CPI hiked to 5.6% by most economists
RBI wont hike but may keep liquidity tight
CRR hike may stay longer than Sept
Rate sensitives like bank and realty stocks may struggle
Money mkts closed today; Rupee down in offshore market
Dollar Index remains sticky above 103, Brent cools off to $85
Big hike in windfall tax and export duty on diesel

MARKET: TEXTURE IS POOR
FIIs have sold stocks worth Rs 10,000 cr in August
In total, FIIs have sold over Rs 14,000 cr since July expiry day
Global markets showing signs of correction, led by US
In India, Bank Nifty has led the decline with 5% fall so far
Mid and Small Caps have been resilient so far
IT and Pharma are strong, suggesting clear risk-off approach
This month: Nifty IT is up 3.7%, Pharma up 2.1%, Bank down 3.4%
Any buying in this market must be done only in IT and Pharma
Bank Nifty has shown signs it wants to test 200 DMA of 42,750
SBI ended at day low despite sharp market recovery
SBI closed below 200 DMA, approaching June lows

NIFTY OUTLOOK
First support: 19,349 (Options based)
Most important support: 19,258 (50 DMA and Monday low)
19,350-19,250 is not the zone to try short positions
If 19,250 starts to break, then another 500 points downside opens
For today, buy on stability between 19,300-19,350, stop loss: 19,258
Sell trade opens if recovery starts to fail
Stop loss for all Sell trades: 19,550
Nifty not as weak as Bank Nifty due to IT, Pharma
Reliance might be under pressure due to export duty hike

BANK NIFTY OUTLOOK
Bank Nifty weakest component of market
First support: Monday low of 43,776
Biggest support: 100 DMA of 43,571
No buy trade in Bank Nifty till stability
Buy in Bank Nifty only on strength above 50 DMA of 44,700
Sell all rallies with stop loss of 44,215