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Newsletter: 02nd December 2024

Google Pixel Boosts Dixon

  • 02nd December 2024
Aaj Ka Bazaar

Global stock markets rallied on Friday, with Wall Street crowning November with its biggest monthly gain in a year on post-election growth hopes. The advance was on account of the rebound in technology stocks.  On the Asian front, indices edged higher after US shares rose Friday as global markets entered a seasonally strong period. Meanwhile, Hang Seng was seen to be under pressure after registering its biggest gains five weeks earlier. Considering the global market cues, the Indian benchmarks are likely to have a subdued start, influenced by the GDP data released on Friday. On a stock-specific note, Aster DM Healthcare and Blackstone—and TPG-backed Quality Care India Ltd. will merge through a share-swap agreement to become India’s number three hospital operator.

Markets Around Us

 BSE Sensex –79,519.29 (0.15%)

Nifty 50 – 24,140.85 (0.05%)

Bank Nifty – 52,087.65 (0.06%)

Dow Jones – 44,879.19 (-0.07%)

Nasdaq – 19,218.17 (0.83%)

FTSE – 8,287.30 (0.07%)

Nikkei 225 – 38,333.95 (0.33%)

Hang Seng – 19,465.62 (0.22%)

Award Winning Resaerch
Desh Duniya Bazaar

Sector: Consumer Electronics

Dixon Tech surges on google deal

Dixon Technologies’ shares surged nearly 6% to a 52-week high of ₹16,739 after its subsidiary, Padget Electronics, announced plans to mass-produce Google Pixel smartphones in collaboration with Compal Smart Device India. Production will take place at Dixon’s Noida plant under a contract signed earlier this year. The stock has gained 150% year-to-date, significantly outperforming the Nifty 50’s 11% rise. Analysts at Nomura maintain a “Buy” rating, targeting ₹18,654, citing potential revenue growth of ₹15 billion by FY26 from Pixel production. Dixon is expected to benefit from higher realisations per unit and its strong position in premium smartphone manufacturing as companies diversify away from China. The shift aligns with India’s growing role in global electronics, bolstered by the government’s proposed ₹400 billion incentives for local manufacturing, which could further enhance Dixon’s opportunities in high-value components like PCBs, camera modules, and lithium-ion cells.

Why it Matters:

Dixon Technologies’ collaboration to manufacture Google Pixel smartphones positions it as a major player in India’s growing electronics manufacturing sector. This aligns with the global shift away from China, opening significant revenue and growth opportunities. Additionally, government incentives for local production could further boost Dixon’s competitive edge and profitability.

NIFTY 50 GAINERS

MARUTI – 11250.35 (1.59%)

SHRIRAMFIN – 3058.60 (1.29%)

SUNPHARMA – 1803.75 (1.28%)

NIFTY 50 LOSERS

ONGC – 253.20 (-1.36%)

EICHERMOT – 4780.00 (-1.07%)

HDFCLIFE – 650.85 (-1.05%)

Desh Duniya Bazaar

Sector: Banking

RBL Banks drops on partnership end

RBL Bank shares fell 4% after announcing the end of its eight-year partnership with Bajaj Finance for co-branded credit cards, citing changing synergies. Despite this, RBL plans to grow its credit card business through new partnerships with NBFCs like Mahindra Finance and consumer brands like IOC and IRCTC. Bajaj Finance was a key sourcing partner, and the move could slow credit growth by 200 basis points to 13-14% in FY25, with a potential dip in net interest income. Growth is expected to recover in H2FY25 as the bank ramps up collaborations with new partners to diversify its portfolio.

Why it Matters:

The end of RBL Bank’s partnership with Bajaj Finance impacts its credit growth and income due to Bajaj’s key role in sourcing customers. The bank’s shift toward new collaborations signals a strategic pivot to diversify partnerships. This development may temporarily affect financial performance but positions RBL for long-term growth.

Desh Duniya Bazaar

Around the World

Asian stock markets rose on Monday, led by gains in China after positive factory activity data showed the economy is improving thanks to government stimulus. Key indexes like the Shanghai Composite and CSI 300 advanced, and China’s manufacturing PMI reached its highest level since June. Other markets, like South Korea, Japan, and the Philippines, also saw small gains, while India’s Nifty 50 slipped slightly. However, overall gains were limited due to concerns over potential U.S. tariffs on BRICS countries and ongoing trade tensions. The U.S. Federal Reserve’s rate decisions and key economic data are in focus this week, along with the Reserve Bank of India’s upcoming rate decision. Meanwhile, Japan’s factory output continues to shrink, and Australia’s retail sales beat expectations, helping its markets inch higher. Traders are watching for global economic cues as markets weigh optimism in China against broader trade and inflation challenges.

Option Traders Corner

Max Pain

Nifty 50 – 24,100

Bank Nifty – 52,500

Nifty 50 – 24,082 (Pivot)

Support – 23,976, 23,820, 23,714

Resistance – 24,237, 24,343, 24,498

Bank Nifty – 51,995 (Pivot)

Support – 51,819, 51,583, 51,408

Resistance – 52,231, 52,406, 52,642

Desh Duniya Bazaar

Did you know?

FPI buying resumes strong

Foreign Portfolio Investors (FPIs) made net purchases of ₹10,000 crore in Indian equities, breaking a 36-session selling streak. The shift came amid positive market sentiment following the BJP-led alliance’s win in Maharashtra. This marks renewed foreign interest in India’s stock market.

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Newsletter: 29th November 2024

Stock Split Sparks Buzz

  • 29th November 2024
Aaj Ka Bazaar

The US bourses were closed on Thursday on account of Thanksgiving. On the Asian front, both Nikkei and Hang Seng were seen to slump. The decline in Japan’s frontline index was likely on the back of the strengthening yen, increasing the pressure on the export-focused economy. Meanwhile, Hong Kong stocks continued to remain on track for a second consecutive monthly decline. The markets were likely weighed by the disappointment in China’s fiscal stimulus package and fresh tariff prospects from the Trump administration. The Indian benchmarks are expected to make a muted start yet again, driven by a lack of triggers in the market. On the stock-specific front, RIL’s subsidiary has entered into a stock purchase agreement with Wavetech Helium and acquired 21% of stakes in the company.

Markets Around Us

BSE Sensex -80,121.03 (0.15%)

Nifty 50 – 23,927.15 (0.05%)

Bank Nifty – 51,984.15 (0.15%)

Dow Jones – 44,834.12 (0.25%)

Nasdaq – 19,060.48 (-0.59%)

FTSE – 8,281.22 (0.08%)

Nikkei 225 – 38,208.47 (-0.37%)

Hang Seng – 19,564.10 (1.02%)

Award Winning Resaerch
Desh Duniya Bazaar

Sector: Jewellery

PC jeweller share surge on split

PC Jeweller’s shares rose 4.08% in early trade on November 29, reaching ₹162.60 on the NSE, following the announcement of a 1:10 stock split with a record date set for December 16. This means each share with a face value of ₹10 will be split into 10 shares with a face value of ₹1, making the stock more affordable for retail investors. Earlier in July, the company announced plans to raise ₹2,705 crore by issuing warrants to promoters and investors, aiming to reduce bank loans and strengthen working capital. Promoters are set to contribute ₹850 crore as part of this fundraising. The stock split and fund infusion reflect the company’s efforts to improve its financial health and attract more investors.

Why it Matters:

The 1:10 stock split makes PC Jeweller’s shares more affordable, attracting retail investors and increasing market activity. Combined with the ₹2,705 crore fundraising to reduce debt and improve working capital, it shows the company’s focus on financial stability and growth. These steps aim to boost investor confidence and long-term value.

NIFTY 50 GAINERS

HDFCLIFE – 673.20 (2.36%)

SBILIFE – 1448.40 (1.39%)

DRREDDY – 1203.15 (0.94%)

NIFTY 50 LOSERS

TCS – 4205.05 (-0.94%)

POWERGRID – 330.90 (-0.82%)

TECHM – 1704.00 (-0.55%)

Desh Duniya Bazaar

Sector: Construction

NCC gains on ₹3390 crore contract

NCC has secured a ₹3,389.49 crore contract under the Ken-Betwa Link Project for constructing the Daudhan Dam, including planning, design, and hydro-mechanical works, to be completed in 72 months. With a market cap of ₹19,000 crore and shares up 83% in the past year, NCC has a strong project pipeline worth over ₹2.1 lakh crore and an order book of ₹52,370 crore. The water division, comprising 12% of the total order book at ₹6,071 crore, benefits from the government’s Jal Jeevan Mission, which allocated ₹70,163 crore this year. The company aims for FY25 revenue growth above 15%, order inflows of ₹20,000-22,000 crore, and EBITDA margins of 9.5-10%. This contract highlights NCC’s growth momentum and robust position in infrastructure development.

Why it Matters:

This contract strengthens NCC’s order book, showcasing its leadership in large-scale infrastructure projects like the Ken-Betwa Link. It aligns with the government’s infrastructure push, providing long-term revenue visibility. The strong growth outlook, supported by rising order inflows and steady margins, enhances investor confidence.

Desh Duniya Bazaar

Around the World

Asian stocks mostly declined on Friday as the Russia-Ukraine conflict escalated, with Russia targeting Ukraine’s energy infrastructure and President Putin issuing new threats. Japan’s Nikkei dropped 0.5% due to a stronger yen driven by higher-than-expected inflation, raising expectations of a Bank of Japan rate hike. South Korea’s KOSPI fell 2%, led by tech losses, amid concerns over weak economic data, including declines in industrial output and retail sales. Meanwhile, Chinese stocks bucked the trend, with the CSI 300 and Shanghai Composite gaining over 1%, supported by reports of potentially less severe U.S. sanctions on China’s semiconductor industry. Hong Kong’s Hang Seng Index also rose 1.3%, as semiconductor stocks like SMIC saw strong gains. Investors are awaiting China’s manufacturing PMI data on Saturday, expected to show modest growth amid recent government stimulus measures.

Option Traders Corner

Max Pain

Nifty 50 – 24,000

Bank Nifty – 52,600

Nifty 50 – 24,044 (Pivot)

Support – 23,743, 23,572, 23,270

Resistance – 24,215, 24,516, 24,687

Bank Nifty – 52,149 (Pivot)

Support – 51,539, 51,172, 50,562

Resistance – 52,517, 53,127, 53,494

Desh Duniya Bazaar

Did you know?

FPI buying resumes strong

Foreign Portfolio Investors (FPIs) made net purchases of ₹10,000 crore in Indian equities, breaking a 36-session selling streak. The shift came amid positive market sentiment following the BJP-led alliance’s win in Maharashtra. This marks renewed foreign interest in India’s stock market.

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Weekly Report: 25th November 2024

Weekly Trend Report

  • 25th November 2024
Week Gone By

The key equity benchmarks concluded a truncated week with modest gains after Friday’s major rally following strong US labor market data. The Nifty closed above the 23,900 level, and the Sensex settled above the 79,100 mark. The HSBC Flash India Composite Output Index stood at 59.5 in November compared to 59.1 recorded in October, indicating a sharp rate of expansion that was the strongest in three months and above its long-run average. On the global front, US retail sales increased slightly more than expected in October, rising 0.4% last month, above the 0.3% expected, and compared with the upwardly revised 0.8% advance in September. Robust consumer spending helped the economy maintain its strong pace of growth last quarter.

Week Ahead

Next week, The domestic equity market may respond to the outcome of the Maharashtra Assembly election results over the weekend. India’s GDP growth data for the third quarter will release on Friday, 29 November 2024. The Indian economy expanded by 6.7% from the previous year in the June quarter of 2024, slowing from the 7.8% increase in the earlier period. US FOMC minutes on Wednesday, 27 November 2024 will reveal insights into the Federal Reserve’s recent rate cut to 4.50-4.75%, following Donald Trump’s 2024 presidential victory. Japan’s consumer confidence data for November is set to release on Friday, 29 November 2024. The consumer confidence index in Japan declined to 36.2 in October 2024 from September’s five-month high of 36.9.

Technical Overview
  • The benchmark index began the week under selling pressure, continuing its corrective decline from the preceding week. During the first four trading sessions, the price action demonstrated an inability to maintain momentum at the day’s high, consistently closing in the lower quartile of the trading ranges.
  • This trend resulted in a test of the 50 Weekly Moving Average (MA) for the first time since April 2023. However, after this test, the index experienced a long-awaited technical recovery, culminating in a closing increase of 374 points from the prior week and successfully reclaiming the 200 Daily MA. The volatility exhibited a modest increase, as evidenced by a rise of 8.95% in the India VIX, which reached 16.1.
  • The trading week concluded with the majority of broader and sectorial indices reflecting a downtrend, accompanied by a worsening of negative momentum. However, several sectorial indices began to show early indications of diminishing negative momentum, which is a positive development.
  • In terms of market breadth with regards to extension, the percentage of stocks trading above the 10 and 20 Daily MAs (DMA) continues to reside in oversold conditions. Nonetheless, the weak rebound observed on Friday suggests that these figures may not persist in oversold territory.
  • Furthermore, the percentage of stocks trading above the 50 DMA has remained below median levels for the eighth consecutive week. More concerning, the breadth above the 200 DMA has also sustained below median levels for a second consecutive week; continued sub-median performance for at least one month may indicate a transition from a bull market to a bear market.
  • Throughout the truncated trading week, the momentum market breadth remained weak, though a mild recovery on the final day suggests a potential transition from a no-money market environment to a hard-money market.
  • From a technical perspective, the Nifty index is currently testing significant resistance levels and is not entirely out of volatility concerns. As we approach the expiry week of the monthly derivative series, the forthcoming days are likely to be influenced by rollover-centric activities. The zone of 23350-23250 represents critical support, and its maintenance above this threshold will be essential to mitigate further drawdowns. We anticipate a meaningful technical pullback, with pivotal resistance identified near 24535 and 50 DMA, which is currently trading near 24780, potentially serving as a substantial resistance zone.
  • The prevailing market swing confidence remains at a neutral level, indicating that portfolios should exercise caution and refrain from assuming any open risk at this time. It is advisable to await further technical evidence, such as a closing above the designated 24150-24200 zone, to confirm the establishment of a base formation at the current low points.

To view the detailed report click here to   Download 

Weekly Report: 11th November 2024

Weekly Trend Report

  • 09th November 2024
Week Gone By

The markets had a mixed week, ending lower despite some global optimism following the US  Federal Reserve’s 0.25% interest rate cut. The Nifty fell by 156.15 points to 24,148.20, and the Sensex dropped by 237.8 points to 79,486.32. In India, exports of services grew by 14.6% YoY to $32.6 billion, while imports rose by 13.2% to $16.5 billion. The HSBC Composite Output Index also improved to 59.1 in October, better than expected. Globally, the US economy added just 12,000 jobs in October, much fewer than anticipated. Following this, the Fed cut rates by 0.25%. In Europe, the Bank of England reduced interest rates to 4.75%, its second cut since 2020, due to high inflation and slower growth.

Week Ahead

Next week, investor sentiment will be shaped by a combination of domestic and global factors, with particular attention on the final batch of second-quarter results (Q2FY25) from Indian companies, which are expected to offer valuable insights into corporate performance. India’s Consumer Price Index (CPI) and Wholesale Price Index (WPI) will be released on November 12 and November 14, respectively, while balance of trade data will be published on November 15. On the global front, US inflation data will be released on November 13, followed by a speech from US Federal Reserve Chair Jerome Powell on November 15. Additionally, Japan’s GDP growth rate, as well as China’s industrial production and retail sales data, will also be released on November 15.

Technical Overview
  • The markets have been navigating a cautious path over the past week, reflecting a lingering sense of uncertainty.
  • The Nifty index digested the fallout from the US election results, with two days of robust technical rebounds quickly met with selling pressure, leaving the index oscillating within a broad range. In fact, it navigated a substantial 721-point swing throughout the week.
  • As volatility eased, the India VIX dipped by 6.95%, settling at 14.47.
  • However, despite a week characterized by range-bound trading filled with uncertainty, the headline index wrapped up with a net loss of 156 points. Most broader indices are feeling the pressure, finding their uptrends under threat, while sectorial indices have firmly entered a downtrend. On a brighter note, there has been a noticeable improvement in momentum, a positive development.
  • On the market breadth front, while the percentage of stocks trading above 10 and 20 DMA remains below their median, those above 10 DMA have begun to outnumber those above 20 DMA. This suggests a potential shift in intermediate trends and momentum.
  • Stocks that are above their 50 DMA are still lagging, but those above 200 DMA are inching lower to the median levels and a drop below 50% here could intensify the bearish sentiment.
  • Wednesday was a standout day for the momentum market breadth, rekindling hopes for a potential rally. Yet, the week concluded with the second-lowest momentum level seen in the last 10 trading sessions.
  • Technically, the Nifty has not fully escaped the challenges it faces; it has dipped below its 20-week moving average, currently sitting at 24775. A cluster of resistance levels lies ahead, with the 100 DMA at 24709 and a short-term 20-day MA at 24486.
  • This creates a formidable 250-point resistance zone around the 24500-24750 levels, meaning any technical rebounds may struggle once the index approaches this area, making it of cardinal importance to decisively reclaim this zone on a closing basis to attract bullish momentum. 
  • On the flip side, the 23900-23800 zone holds immediate support. Should that be breached, the markets could succumb to greater weakness. As we look ahead, it’s clear we are in for a turbulent ride, with higher volatility and erratic swings expected. Given the current landscape, staying in cash appears to be a wise strategy, as swing confidence remains at zero and the broader market cautions against taking open risks with portfolios right now. 

To view the detailed report click here to   Download 

Weekly Report: 04th November 2024

Weekly Trend Report

  • 04th November 2024
Week Gone By

The benchmarks witnessed mix trend during the week, closing lower despite of two days of gains.  The BSE Mid-Cap index and BSE Small-Cap index outperformed the frontline indices . In the week ended on Thursday, 31st October 2024, the S&P BSE Sensex fell 13.23 points or 0.02% to settle at 79,389.06. The Nifty 50 index jumped 24.55 points or 0.10% to settle at 24,205.35. The BSE Mid-Cap index added 1.13% to close at 45,966.71. The BSE Small-Cap index declined 1.01% to end at 47,946.53. The BSE Small-Cap index rallied 5.06% to end at 54,982.87. On economy front, The finance ministry maintains that the Indian economy will grow between 6.5% and 7.0% in the current fiscal year.

Week Ahead

Next week, investor sentiment will be influenced by a mix of domestic and global factors, with a particular focus on the second-quarter results (Q2 FY25) for Indian companies, which are expected to provide insights into corporate performance .Global stock market movements and the upcoming 2024 United States presidential election on November 5 will also play crucial roles. The behavior of foreign and domestic institutional investors will also be closely monitored . On the macro front, HSBC India Manufacturing , composite & service  PMI data for October will release in the coming week. In the global market, The US Federal Reserve will decide on interest rates on Friday, 8 November 2024.

Technical Overview
  • Over the past five trading sessions, the Nifty has predominantly engaged in a consolidation phase, characterized by a bearish undertone.
  • The index has exhibited trading activity within a defined range and concluded the week with a modest gain. Notably, it remained below critical resistance levels.
  • Accompanying this stabilization, market volatility has increased, evidenced by an 8.68% surge in the India VIX, which reached a weekly close of 15.90.
  • The constrained trading range, with the Nifty oscillating within a 363-point bandwidth, was significantly narrower compared to the preceding week. Despite the overall bearish setup, the headline index achieved a weekly gain of 123.55 points (+0.51%).
  • The conclusion of the week saw several broader and sectoral indices trending downwards; however, a deterioration in their negative momentum could be interpreted as a positive development, signaling a potential transition from a no-money market environment to a hard-money market framework.
  • From a market breadth perspective, the proportion of stocks trading above the ten-day moving average (10-DMA) has returned to levels above the median, indicating improvements in shorter-term trends among these stocks.
  • Conversely, the percentage of stocks trading above the twenty-day moving average (20-DMA) has fallen below the median levels, while those above the sixty-day moving average (60-DMA) are hovering near 60. Further improvement in these areas is deemed essential.
  • Towards the end of the week, there was an uptick in market breadth volume, supporting the transition narrative from a no-money to a hard-money market, as evidenced by enhanced stock participation.
  • It is noteworthy that in the previous week, the Nifty breached and closed significantly below the 100-day moving average, currently situated near 24670. Concurrently, the index also violated the 20-week moving average, which is positioned 24750.
  • Thus, the range of resistance identified 24750-24650 this zone becomes pivotal; the Nifty’s continued presence below this resistance zone renders it susceptible to ongoing selling pressure.
  • The most immediate support for the Nifty is positioned near 23900; a breach of this level could exacerbate market weakness.
  • In anticipation of global market conditions providing a favorable backdrop, it is projected that the Indian markets may experience a stable start to the upcoming trading week on Monday.

To view the detailed report click here to   Download 

Weekly Report: 28th October 2024

Weekly Trend Report

  • 28th October 2024
Week Gone By

The Indian benchmark indices experienced major losses during the week as the market extended its loss streak  to 4 weeks. The decline was driven by the pressure from FII exodus, weak earnings and large scale selloff. The pressure in the broader market was more intense during the week as various indices continued to bleed. The global market also reflected a similar scenario, as weak earnings continue to weigh. Nasdaq was the only anomaly during the week.

Week Ahead

As the investors gear up for the coming week, earnings continue to act a significant trigger, affecting the sectoral trends during the week. Investors will also closely watch on FII and DII activity to gauge the market sentiment. Middle-East escalations will also act as a key trigger that could impact energy prices and volatility in the market. Key economic indicators to follow during the week: US job opening data, Japan Consumer confidence, US Q3 GDP data, BOJ’s interest rate decision and US core PCE price index.

Technical Overview
  • The overextended markets demonstrated a continued decline for the fourth consecutive week.
  • During the past five trading days, despite a few attempted technical rebounds, the Nifty Index has remained largely under sustained selling pressure that resulted in the loss of key support levels on the daily charts, as the trading range expanded significantly. The Nifty oscillated within a substantial 904-point range before culminating in a net weekly loss of 673 points.
  • Additionally, volatility increased, with the India VIX surging by 12.23% to 14.63 on a weekly basis; any movement beyond 15.7 warrants caution.
  • The week ended with the majority of broader market indices and sectoral indices exhibiting pressure on their uptrends, leading to a deterioration in momentum—a concerning development.
  • Market breadth analysis reveals that the percentage of stocks trading above their 10-day and 20-day moving averages has now dwindled to single digits.
  • Furthermore, the percentage of stocks trading above their 50-day moving average has fallen below median levels, currently reading below 20, with similar values last observed in March 2023 and 2024.
  • For the first time since June 2024, the percentage of stocks above the 200-day moving average has also dipped below the 50 median levels. Sustaining these levels for a minimum of one month will be crucial in confirming a transition from the current bull market to a bear market.
  • However, with stock participation at extreme lows, these trends indicate oversold conditions, hinting at the potential for a mild technical pullback in the near future.
  • The upcoming week presents a truncated trading schedule; as Friday’s trading session will feature a brief ceremonial Mahurat session lasting only one hour.
  • The Nifty has breached its critical support levels on the daily chart, specifically 20-week moving average positioned near 24700. This adverse technical landscape has lowered resistance levels for the Nifty to the range of 24500-24700.
  • Consequently, any potential technical rebounds are likely to encounter resistance in this zone, implying that rebounds will be  susceptible to selling pressure as long as the markets remain below this threshold.
  • In light of the current technical setup, the market has entered a challenging environment characterized by a risk-off sentiment. It is imperative to prioritize investments in stocks demonstrating strong relative strength compared to the broader market. A selective and cautious approach is thus advised for the forthcoming week.

To view the detailed report click here to   Download 

Weekly Report: 21st October 2024

Weekly Trend Report

  • 21st October 2024
Week Gone By

The Indian benchmarks witnessed substantial losses during the week, extending their losing streak for the third consecutive week. The indices were lower for three out of five trading sessions. The BSE Mid-Cap index and BSE Small-Cap index fell. In the week ended on Friday, 18 October 2024, the S&P BSE Sensex tumbled 156.61 points or 0.19% to settle at 81,224.75. The Nifty 50 index declined 110.20 points or 0.44% to settle at 24,854.05. The BSE Mid-Cap index fell 0.18% to close at 56,600.05. The BSE Small-Cap index declined 1.01% to end at 47,946.53. On economy front, India’s wholesale price index (WPI)-based inflation rose to 1.84% in September as food items, especially vegetables, turned costlier, as per the government data released on Monday.

Week Ahead

Investor are gearing up for a week filled with corporate earnings and global market dynamics. The second-quarter results (Q2FY25) for Indian companies will be a key focus, potentially influencing sectoral trends. Meanwhile, global stock market movements, the rupee’s exchange rate, and crude oil prices will also play pivotal roles in shaping the market’s direction. Investors will be closely monitoring the activities of foreign portfolio investors (FPIs) and domestic institutional investors (DIIs) to gauge their sentiment. On the macro front, HSBC India PMI data for October will release on Thursday, 24 October 2024. In the global market, United States Durable Goods Orders data for September will release on Friday, 25 October 2024.

Technical Overview
  • The Nifty50 began the trading week positively; however, due to shorter-term moving averages acting as overhead resistance, selling pressure led to a decline throughout the week.
  • The index tested pivot supports in the zone of 24750-24650 and experienced a slight recovery on Friday.
  • The VIX decreased by 1.38% for the week.
  • The trading week concluded with most broader and sectoral indices under pressure but showing improved momentum compared to the previous week, indicating a positive development.
  • The market breadth concerning short-term trends exhibited deterioration, as the number of stocks trading above their 10 and 20-day moving averages failed to sustain above median levels. The number of stocks above the 10-day moving average dipped below those above the 20-day moving average.
  • The larger trend remains steady, with stocks trading above the 50 and 200-day moving averages maintaining their positions above median levels. However, further improvement in stocks above the 200-day moving average is necessary for a healthier market.
  • Toward the end of the week, the momentum market breadth showed a declining trajectory, and market breadth volumes indicated  reduced stock participation, resulting in a more selective market environment.
  • Moving forward, the behavior of the Nifty against the 25000-25100 zone is significant, given that the 25100 aligns with the 50-DMA, while the 25000 level is a psychologically important threshold.
  • The upcoming week may begin subdued, with levels of 25100 and 25440 serving as potential resistance points.
  • The 24750-24650 zone is anticipated to provide immediate and firm support, and sustainability above it could strengthen bullish conditions in the index.
  • Conversely, failure to hold above this zone may lead the Nifty to address the former gap-down area until 24300. The overall swing confidence is rated at 25 out of 100, indicating a need for portfolios to adopt minimal acceptable risk.  

To view the detailed report click here to   Download 

Weekly Report: 14th October 2024

Weekly Trend Report

  • 12th October 2024
Week Gone By

The market ended the week with minor cuts, declining for the second straight week, with Nifty settling below the 25,000 level. The RBI Governor announced that the MPC decided to maintain repo rate at 6.5% and projected GDP growth at 7.2%, while shifting from a ‘withdrawal of accommodation’ to a ‘neutral’ policy stance. Titan reported 25% standalone revenue growth in Q2 FY25, while TCS’ net profit declined by 1.08%, and operational revenue increased by 2.63%. On the global front, the British economy rose by 0.2%, US CPI inflation eased to 2.4%, core CPI rose by 0.1%, and US jobless claims increased to 258,000.

Week Ahead

Investors await Q2 corporate earnings and major global markets like the US and China will be under scrutiny. The rupee-dollar exchange rate and crude oil prices are being closely monitored, as an increase in crude oil prices affects inflation, corporate margins, and consumer spending. India’s WPI and CPI will be declared on October 14, while balance of trade data will be released on October 15. Globally, US retail sales data will be released on October 17, Japan’s inflation data on October 18, and China’s GDP, industrial production, and retail sales data on October 18.

Technical Overview
  • The past week exhibited a stark contrast to the preceding one, with the market undergoing significant consolidation within a narrow range.
  • The trading week began with the Nifty50 index facing selling pressure and breaching below the 50-DMA, but managed to avoid a distribution day. Subsequently, the index experienced a slight recovery and moved sideways within a narrow range around the 50-DMA, ultimately closing the week 50 points lower than its previous close.
  • The index sought to limit drawdowns, with the pivot point and the previous gap-down area near 24750 serving as immediate support.
  • Concurrently, the fear index, or VIX, witnessed a 6.4% decline throughout the week.
  • By the week’s end, most broader indices were trading with their uptrends under pressure, while their negative momentum showed improvement. While, several sectorial indices, trending with their uptrends under pressure, witnessed deteriorating negative momentum.
  • In terms of market breadth, stocks trading above their 10 and 20-DMA exhibited a reversal trajectory from oversold territory, signalling initial positive signs. However, stocks trading above 50 DMA continued to trade below median levels for consecutive weeks.
  • Notably, there was a significant improvement in momentum market breadth and market breadth volume, indicating improving stock participation and a potential transition from a no-money market to a hard-money market.
  • Consequently, risk-aware market participants can consider initiating pilot positions.
  • Looking ahead, the coming weeks are pivotal from a short-term perspective. Notably, the NIFTY Bank and FINNIFTY will no longer have weekly contracts starting November 20 due to recent SEBI directives. Only NIFTY will offer weekly contracts, potentially leading to increased volatility in the indices in the coming days.
  • Of significance is the Nifty’s behavior against the 25000-25050 zone, given that the 25050 aligns with the 50-DMA, while the 25000 level remains a psychologically important threshold. The upcoming week may witness a subdued start, with the levels of 25050 and 25440 serving as probable resistance points. The 24750-24650 zone is expected to provide immediate and firm support, and sustainability above it could bolster bullish strength in the index.

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Weekly Report: 07th October 2024

Weekly Trend Report

  • 04th October 2024
Week Gone By

The key equity indices ended the truncated week with significant losses amid heightened tensions in the Middle East, triggered by the Israel-Iran conflict. India’s fiscal deficit improved to 27% of the full-year target for April-August, down from 36% in FY24, while the HSBC Manufacturing PMI fell to 56.5 in September. Tata Motors reported an 11.52% sales decline, contrasting with Bajaj Auto’s 19.60% increase. In broader economic news, the British economy grew 0.5% in Q2, Germany’s inflation rate fell to 1.5%, China’s central bank plans to cut mortgage rates, and the US added 143,000 jobs in September, reflecting resilience in the job market.

Week Ahead

FPIs are reallocating funds from India, viewed as expensive, to Hong Kong amid optimism for a Chinese economic rebound. Market dynamics will hinge on rupee-dollar fluctuations, crude oil prices, and domestic institutional investor (DII) activity. The Reserve Bank of India’s Monetary Policy Committee will meet from October 7-9, with outcomes announced on October 9, while industrial production data for August will be released on October 11. Globally, the US will publish key inflation and consumer sentiment data on October 10 and 11, following a recent rate cut by the Federal Reserve.

Technical Overview
  • Amidst geopolitical tensions in the Middle East, SEBI’s announcement of changes in the derivatives trading landscape, and significant FII selloffs, the market faced strong corrective pressure, ending the week on a weak note.
  • The Nifty 50 remained under selling pressure throughout the week, showing no intention of a technical pullback. The market experienced persistent weakness in all four trading sessions, with a widening trading range of 1167 points over four days.
  • Additionally, volatility surged, with the India VIX rising by 18.10% to 14.13 on a week-on-week basis.
  • The benchmark Nifty 50 closed with a substantial weekly decline of 1164.35 points (-4.45%).
  • The week concluded with broader and sectorial indices trending downward, indicating deteriorating momentum and worsening market breadth.
  • A significant number of stocks traded below their respective 10 and 20-day moving average, nearing oversold territory, while those above their 50-day moving average also fell below the median threshold.
  • Stocks trading above their 200-day moving average dipped below the 70 levels, signaling early signs of market weakness, although further confirmation is necessary.
  • The market breadth shifted to highly pessimistic momentum, reflecting diminishing stock participation.
  • On the technical front, the price action is currently trading slightly below the 50-day moving average, considered institutional support. Reclaiming the average line, currently trading near 25033, on a weekly closing basis in the coming week is crucial; otherwise, selling pressure may persist.
  • A follow-through on the upside in the coming week is essential.
  • Derivatives data suggest that the market may seek support at 25,000 levels, which hold the highest PUT OI and minimal Call OI, making it a psychologically important level.
  • A stable start to the week is expected, with major resistance levels at 25430 and 25790, and major supports anticipated at 24780 and 24600.
  • Currently, most broader and sectorial indices are experiencing an early downswing. As a result, overall swing confidence remains low, indicating that portfolios should refrain from taking any open risk.

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Weekly Report: 30th September 2024

Weekly Trend Report

  • 30th September 2024
Week Gone By

The Indian frontline indices managed to end the week with decent gains as they continued to record new record highs during the week. The broader markets howeer remained under pressure during the period. The frontline gains was largely driven by the overall positive sentiment in the market. The key sectors contributing to the gains were Auto and Oil & Gas. The global markets also maintained a positive momentum, with the Asian indices being the star while the US markets made modest gains.

Week Ahead

Global market trends, exchange rate movement and crude oil prices will significantly influence the domestic market in the week ahead. FII & DII flow data will also be closely monitored by the                  participants. The Q2 current account data will be released on Monday, while the HSBC PMI data will be released on Tuesday. Key international economic data during the week consists of China’s PMI data, Eurazone Unemployment rates, US service PMI data, India service PMI and US Non-Farm payroll.  

Technical Overview
  • The benchmark index began the trading week with limited activity and remained relatively stable until mid-week.
  • The early week’s potential accumulation resulted in a surge in price movement on Thursday, ending the week 388 points higher and reaching new all-time highs of 26277.
  • Large-cap stocks displayed a positive divergence compared to mid and small-cap stocks, suggesting potential flows from the latter into the former.
  • However, the week concluded with major broader and thematic indices confirming an uptrend, albeit with subdued positive   momentum.
  • Market breadth analysis indicated that stocks trading above their 10 and 20 daily moving averages retraced below the 50% threshold, while those trading above their 50 and 200 daily moving averages continued to trade above their mean levels. This suggests that the shorter-term trend remains subdued while the primary trend remains intact.
  • The momentum market breadth remained largely positive, with the 5-day ratio trending above threshold levels, signalling favourable swing trading conditions.
  • Market breadth volume remained subdued for most of the week, indicating selective stock participation. On the technical front, the zone of 26250-26280 represents crucial resistance.
  • The index, while slightly extended, will require a decisive confirmation on closing above the zone for further trend continuation.
  • The index holds immediate support near 25950. As long as the Nifty sustains above 25750, it is expected to continue attracting bullish strength.
  • The swing confidence remains at 50, signifying that the portfolio can take half the permissible open risk.

 

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