WAR GAMES? 07.05.25

The Bank Nifty was clear with its signal yesterday even as the Nifty put up fight. I had mentioned in the earlier post we would want to see both the indices flash similar signals. As of now, the NF is down into the weekly Cpr and break of that will align it with the BNF. Further, 24180-24100 area would be the next signal for declines. For the BNF 54100 would be th next level to watch for further weakness.
FII added more Index long than shorts closed, taking the net short now to just 2647 contracts. DIIs chose to trim their long index positions. In cash, FIIs were again seen to be buyers. Usually it is seen that when FIIs are buyers across a month, it turns out to be a positive month. April was positive. Now, can this buying last out for the whole month? I dont know, lets see. So far, the FII data is a positive one. Will the proverbial ” wall of worry” come into play here? Lets see.
Sector were pretty mixed and quite selective. Bank results disappointed, with BoB hitting lower circuit! This will certainly impact the trends of the balance PSU bank results to come in. In IT matters have been selective and moves are seen likewise. Metals were trying to maintain or rally.

Dollar continues to weaken gradually and INR gains under the double positive of FII inflow and lower Oil prices (now under $60 too). Both these can be positives for our economy but war scenario (mock drills across the country) or talks around that continues to dominate and the tariff thing is still an overhang. So the whole thing is a tradeoff for now.

If indices slip further, stocks may not hold up. But if Nifty survives, then stocks with some good results can still rally. Tread cautiously. A call to book profits on existing holdings has already been given earlier. News flow is positive for OMC stocks so there you could see some defensive buying at lower levels.