Author: Amal M Prashanth

LAST WEEK

NIFTY opened flat at 16,295 on Monday, faced resistance at 16,400 and closed just above 16,200. The index traded in a bearish channel till Thursday noon. The index took support at 16,100 on Tuesday and opened with a gap-up on Wednesday only to fall to 16,000. There was a huge down-move on Thursday and a fierce recovery in the second half. There was extreme volatility and the index closed around 16,200. There was follow-up on Friday and NIFTY closed the week at 16,352, up by 0.5%.

BANK NIFTY was bullish last week. The index opened flat at 34,330, faced resistance at 34,800 and fell. There was consolidation on Tuesday followed by a gap-up opening on Wednesday. However, the resistance zone near 34,800 kept pushing BNF down, even after the index opened with a gap-up on Thursday. But BANK NIFTY took strong support above 34,400 on Thursday and gave a stellar recovery and closed above 35,000. The follow-up on Friday led BNF to close at 35,613, up by 1,337 points or 3.9%.

IT closed flat but is continuing the bearish trend. Metal stocks, the most moving sector nowadays are nearly 9% down WoW.

Foreign Institutional Investors net sold shares worth Rs 10,000 crores last week taking the monthly figures to 44,000 crores.

Domestic Institutional Investors net bought shares worth Rs 11,000 crores and the monthly figures stand at 47,000 crores.

The western markets are in recovery mode. The US markets have moved up by more than 6% last week! The European markets are 3% in the green WoW. But the Asian markets are in consolidation mode though there is intraday volatility. At the same time, remember that the Chinese markets had not fallen like the US markets in the beginning of the month and hence they stand similar on a monthly basis.

Raphael Bostic, one of the Fed’s dovish policy makers said that he stands for a pause in rate hikes in September. Powell in his speech on Tuesday said for the first time that the Fed may not be able to defend recession. When the Fed minutes came out on Wednesday in line with the expectations, the markets rallied. 

Other major events of the week were:

Metals fell by 8% as export duty of 15% was imposed on steel. Also, the import duty on raw materials was decreased. This was done to reduce the cost of domestic production. 

RBI Governor hinted that there will be rate hikes in the coming meetings, the next being on 8th June.

ECB member said that he would appreciate a 50 bp hike in July.

Bostic, one of the dovish policy makers, said that he stands for a pause in rate hikes in September.

Snapchat fell by 43% on Tuesday as the forecasts were weak. 

Powell in his speech on Tuesday said for the first time that the Fed may not be able to defend recession.

Joe Biden replied positively to whether the US would interfere militarily if Taiwan was attacked. This angered China and they conducted a military drill near the Taiwan border and expressed their discontent. White House clarified that the President meant only military aid and not a direct intervention. 

The US quarterly GDP was expected to shrink by 1.3% and it did shrink by 1.5%. However, there was an increase in consumer spending. 

SGX NIFTY is at 16,435.

INDIA VIX is at 21.5 and the US VIX has reduced to just below 26.

WEEK AHEAD

NIFTY has supports at 16,300, 16,240, 16,000 and 15,900. We can expect resistances at 16,400, 16,450, 16,600 and 16,680.

BANK NIFTY has supports at 35,400, 34,800 and 34,400. Resistances are at 36,000,, 36,400 and 36,800.

Excluding deep strikes, NIFTY has the highest call OI build-up at 16,300 followed by 16,500. The highest put OI build-up is at 16,000 followed by 16,300.

It is an unusual straddle build-up at 16,300.

BANK NIFTY has the highest call OI build-up at 36,000 and the largest put OI build-up is at 35,000.

Our quarterly GDP growth rate will be out on Tuesday. There are diverse estimates ranging from 2.7% to 5.5% with some saying that the Ukraine war and the crude oil prices might have impacted the GDP severely whereas some economists feel that the war might not have impacted much as the retail fuel prices were hiked only after the state elections.

Germany’s inflation data will be out on Monday and the Eurozone inflation data will be out on Tuesday with expectations around 7.7%.  The Chinese PMI data to be released on Wednesday will be important as the economy was affected by the lockdown. Beijing has partially reopened and the Shanghai lockdown may end on 1st June. 

The US markets will be on holiday tomorrow as it is Memorial day. The hawkish policy maker Bullard will speak on Wednesday.

Let us watch the events closely and keep an eye on the levels 16,400 on the upside and 16,200 on the downside. Looking at a wider range, 15,900-16,700 is a zone for NIFTY to trade in the coming days.

Let us know your expectations for the week in the comments section!

LAST WEEK

NIFTY opened with a gap-up at 15,853 on Monday but then moved down due to negative retail sales data from China. The index broke 15,970 on Tuesday and there was a huge short covering rally taking the index above 16,250. Wednesday saw a small fall. There was a huge fall on Thursday following the US markets as the retail segment stocks had fallen along with prevailing negativity around inflation. There was a rally on Friday with China reducing the 5 year LPR. NIFTY closed the week at 16,266, up by 484 points or 3.07%.

BANK NIFTY opened flat at 33,263. There was resistance at 33,700. The index moved higher the next day but faced resistance at 34,500 and fell heavily on Thursday. There was a strong support at 33,200 and the index moved up on Friday and closed the week at 34,276, up by 1155 points or 3.49%.

IT closed flat.

Foreign Institutional Investors net sold shares worth Rs 11,000 crores last week.

Domestic Institutional Investors net bought shares worth Rs 9,000 crores.

It is volatility everywhere. It was a hard week for positional traders with extreme volatility in the US markets. The west is down by 3%. At the same time, Indian markets have closed the week in the green though there was volatility.

China reduced the 5 year Loan Prime rate to revive the real estate sector in China. This influenced the market sentiments and we rallied. Bear markets always exhibit volatile pull-backs. Make sure that you do not fall trap in volatile moves.

There are reports that the US would overtake China in growth for the first time since 1976. The US is expected to post 2.8% growth whereas China’s growth would be 2% only.

Other major events of the week were:

Russia fired missiles near the Polish border. But the markets ignored.

LIC disappointed the investors without giving listing gains.

Adani will acquire AG’s cement businesses in India to become the second largest cement producer.

RBI Governor asked banks to watch geopolitical developments closely.

Finland and Sweden have submitted applications to join NATO.

HPCL Chairman said that Government level talks are going on to purchase Russian oil at discount.

China also is in talks to buy oil for strategic reserves.

Indonesia lifted the ban on palm oil exports.

There are reports that the US would overtake China in growth for the first time since 1976. The US is expected to post 2.8% growth whereas China growth would be 2% only.

SGX NIFTY is at 16,171.

INDIA VIX is at 23.1..

WEEK AHEAD

NIFTY has supports at 16,185, 16,100, 16,000.. We can expect resistances at 16,340, 16,410, 16,485, 16,600.

BANK NIFTY has supports at 34,000, 33,700, 33,400. Resistances are at 34,440, 34,700, 35,000 and 35,200.

NIFTY has the highest call OI build-up at 17,000 followed by 16,800. The highest put OI build-up is at 16,000 followed by 15,800.

BANK NIFTY has the highest call OI build-up at 35,000 and the largest put OI build-up is at 34,000.

Let us closely watch the US markets more this week as they are too volatile and the influence on our market can be large with Fed minutes on the table.

The minutes of the April meeting will be released on Wednesday. We have Powell and Bostic speaking on inflation on Tuesday and Monday respectively.

Major earnings the market is waiting for are that of Mahindra & Mahindra, SAIL, Zomato and ONGC. We have the IPO of Aether Industries opening on 24th May. Delhivery and Paradeep Phosphates will be listed this week.

You can also watch the GDP growth report of the USA on Thursday and CPI inflation data of Japan on Friday.

Let us not confirm strength in the market as we have seen such quick moves from the bottom recently as well. Watch the gap above 16,485. I will be watching 15,750 on the downside in the long term.

Let us know your expectations for the week in the comments section!

LAST WEEK

NIFTY opened with a gap-down at 16,255 on Monday and ended the day below 16,300. Selling continued in the following days and NIFTY broke 16,000. Thursday was a clear downtrending day and the index closed at around 15,800. Friday was rather volatile with the index moving higher up to 16,070 and then falling to break the previous day-close. SBI results made the day volatile. NIFTY closed the week at 15,782, down by 629 points or 3.83%.

BANK NIFTY opened with a gap-down at 34,225 and tried moving higher unlike NIFTY. The index was just below 34,800 on Wednesday prepared for a shoot but the gap-down opening spoiled the party. BNF ended the expiry day just above 33,500. Gap-up opening on Friday was futile with the index falling heavily after taking resistance at 34,000 and BNF closed the week at 33,121, down by 1470 points or 4.25%. 

Metals moved down by 12% last week.

Foreign Institutional Investors net sold shares worth Rs 20,000 crores last week.

Domestic Institutional Investors net bought shares worth Rs 18,000 crores.

Though the global markets had fallen in the last few days, there was a fantastic recovery. There was buying pressure in the US and summing up the week for Europe, it was a green week but with heavy falls in the first days. One thing we can assertively say is that the markets were rather volatile.

If you look at the weekly charts, you will not be able to see the buying pressure in NIFTY unlike the other markets. The US markets closed well in the green on Friday with NASDAQ moving higher by nearly 4%.

Rupee fell to the lowest last week. On top of it came the inflation data at 7.79% against an expected 7.5%. But the markets were already in shock with the US CPI coming out at 8.3% against 8.1%. What caused the panic was the core inflation that came at 0.6% against 0.4%. It was just 0.3% in March. This led to the fall in the global markets.

SGX NIFTY is at 15,892.

INDIA VIX spiked to 23.5.

WEEK AHEAD

NIFTY has supports at 15,740, 15,670 and 15,600. We can expect resistances at 15,860, 15,920 and 16,000.

BANK NIFTY has supports at 33,000, 32,850 and 32,200. Resistances are at 33,450, 33,900 and 34,000.

NIFTY has the highest call OI build-up at 17,000 followed by 16,800. The highest put OI build-up is at 15,000 followed by 15,500.

BANK NIFTY has the highest call OI build-up at 34,000 and the largest put OI build-up is at 32,500.

Note that BNF is almost at the low created during COVID. I will be watching 32,850 closely.

ITC will announce their quarterly results on Wednesday. Bharti Airtel is another heavyweight coming up with results this week, on Tuesday.

LIC will start trading on 17th May. News from the grey market is not that satisfying as it is trading at a discount now. Let us see how the stock starts trading. This will definitely have an impact on the sentiments of our market.

We have WPI data coming out on Wednesday. Japan and the EU also will announce their inflation rates on Friday and Wednesday respectively. Another event you can watch is Jerome Powell’s speech on Tuesday.

Focus has shifted from the Ukraine war to inflation and interest rate hikes. Note that no peace talk took place since 29th March. Nifty will have to face multiple resistances above 16,000 while moving up.

Let us know your expectations for the week in the comments section!

LAST WEEK

NIFTY opened with a gap-down at 16,949 on Monday and closed above 17,000 after the index consolidated due to lack of cues. Wednesday saw a gap-up at 17,111 after a day off on account of Eid. There was a heavy fall and the repo rate hike led to an even larger fall. The fall continued on Thursday after a temporary up-move. NIFTY fell with a gap-down on Friday due to the weak global sentiments and consolidated thereafter. The index closed the week at 16,411, down by 691 points or 4%.

BANK NIFTY opened with a gap-down at 35,683 on Monday and moved up. 36,300 offered resistance and BNF fell further. 34,400 acted as a huge support on Friday and BNF closed the week at 34,591, down by 1497 points or 4.15%. 

All the sectors fell last week.

Foreign Institutional Investors net sold shares worth Rs 12,700 crores last week.

Domestic Institutional Investors net bought shares worth Rs 8,500 crores.

The markets revolved around inflation and interest rate hikes. The Repo rate was hiked by 40 basis points on Wednesday taking the investors to surprise and the markets fell heavily. Cash Reserve Ratio also was increased by 50 basis points. US Fed reserve increased the interest rate by 50 basis points and the US markets shot up as it was in line with the expectations but fell heavily the next day.

Bank of England increased the interest rate by 25 basis points. But what led to the concerns was the inflation projection by BOE at 10%. The interest rate in England is now at the peak since 2009.

Our markets fell much more than the West.

LIC IPO has been oversubscribed.

SGX NIFTY is at 16,419.

INDIA VIX rose to 21.3.

WEEK AHEAD

NIFTY has supports at 16,340, 16,250, 16,000 and 15,850. We can expect resistances at 16,450, 16,660, 16,880  and 16,950.

BANK NIFTY has supports at 34,400, 34,000 and 33,500. Resistances are at 34,800, 35,000 and 35,250.

NIFTY has the highest call OI build-up at 17,000 followed by 17,400. The highest put OI build-up is at 16,000 followed by 16,400.

BANK NIFTY has the highest call OI build-up at 36,000 and the largest put OI build-up is at 34,000.

The markets will first react to the Reliance earnings which were good but still short of estimates. 

April CPI will be a major concern as the expectations are around 7.5%. If the figure crosses the estimated value, then you can expect a further fall.

Keep an eye on crude oil as there are supply concerns.

I will be closely watching 16,000 on the downside.

Let us know your expectations for the week in the comments section!