Insights

The policy has been announced and the expected 50bps hike has occurred. Since it was already factored in, it had no negative effect. Instead, the market has chosen to focus on some positive commentary by the Governor and pushed the indices up nicely from the lows. If we look at today's price action and the rollover data which showed that the FPIs had a large index short positions as well as a net stock future short for the first time since Nov 2021, it is easy to conclude that today's action is largely short covering by the FPIs mixed with some relief buying by local traders. Retail had large substantially larger long stock future position and I expect a lot of this was pending longs which will now act as an overhang as prices move up. So short covering from one set of players shall be met by long liquidation from another set. Net effect will be to reduce the overall position in the market. Hence expect market to turn neutral and range bound in the next week. Today's longs should be cut at higher levels today and not carried over.

Over the last four sessions the Nifty has been confined to a falling channel at 16880- 6760. It should not be difficult to breakout out higher from this channel and if it does so, then we would be warned that the market is changing around in its intent. The gap zone of the week is at 17185-17300 and that will be the main resistance zone for any up moves. Shorting of 17000Ce and higher is seen in next weekly series. But on the monthly series, there is still large PE shorts at 500 point intervals down from 17000 and the PCR is 1.02. So bulls haven't given up yet?
Reliance is not looking healthy unless it picks itself up immediately. ITC is still trading ok while Hind Lever is still quite positive. Hdfc twins are not in good shape right now. The Bajaj twins are trying to stay afloat. The IT majors are drifting as well. So all in all, the Nifty majors are in a bit of a struggle.

Bearishness in Bank Nifty prevails as we continue to see Call shorts starting from 38000 strike. Again not much of puts added in weekly series and the Pcr is at 0.61, But here too picture shifts to put shorts when you check the monthly series. Pcr is 0.91 here.
BNF too is in a down channel with a top bound at 38150. Lets see what it does with that resistance and then decide. The big gap zone resistance is at 39500-39250 and that may remain formidable for now. Leading bank stocks are in poor shape. Hdfc Bk is looking at 1320 levels if it cracks down. Weakness in SBI can hurtle it towards 505-495. Icici Bk is the only one that looks like it may survive. So bank heavies not in favour as well.
Therefore to expect that something will suddenly come out of the blue to save the trends would be stupid. I would expect market to remain contained until around second week of October. Trading market with a down bias and stock specific nature shall be the play.

AS we draw down to the monthly expiry, the down move seems to be kind of exhausting itself. We almost did a retest of yesterday bottoms and the Nifty went even trifle lower. Matters continue to look dicey for the balance hour. The high open was sold into so the sentiment overhang was still bearish but market could not be forced lower nor could it go higher. In that sense, the morning expectation that we would range was accurate. The daily charts in both Nifty and BNifty are negative and thus, the expected rally into tomorrow also becomes a bit of a question mark now.

Market wasa volatile yesterday. A low was made soon after the open and mild rally followed but towards the end prices got pressured again and finished near the lows. The fall happened towards the end and seems to have been engineered a bit. The news about BoE action had come during market time and the Pound has a high correlation to the Dow and therefore the chances of a rally in the Dow was quite high probability. Accordingly, today morning Sgx shows a gap up start. Some further long positions were let go and shorts reentered in the ending bearish session and these will be ripe for short squeeze today.
The Max pain has dropped sharply with all these activities to 16950-17000 zone in NF and to 38200 in BNF. Large call shorts now exist but tody is expiry and there is not much scope for them to get squeezed. The expected rally may therefore be seen tomorrow rather than today. So, after a gap up start, we may see position adjustments thru the day. With buying emerging at lower levels, larger players may be unwilling to short at lower levels. Too much hurdle to move higher will prevent rallies to persist. Hence, look for some ranging action.

Here is a clue for today's trading
Look for Nifty to make an intra day bottom before Bank Nifty. Nifty is expected to make a bottom in the first couple of hours but Bank Nifty may make a low only towards the last hour or so.
Lets see how this expectation turns out. So will be watching Nifty a lot more closely than Bank Nifty today.

The Sgx is pointing further south, rendering yesterday's attempts to stay in a range asunder. The suddenness with which the indices fallen has unnerved the traders. Nifty was ranged between 17175-16980 for the last two days and many were drawing solace from the 200dma in that zone. But the key to any support level working is its ability to send prices higher. This did not happen in the Nifty and hence the possible caving in of this range today should hurtle the Nifty towards the 16850-725 zone area. Yesterday 16900 and 17000 PE were written in expectation of a rally and these are pressured today.
Bank Nifty should head towards 38000-37800 area. Here puts at 37500 were added yesterday so that may get defended. Both indices are trading well below the Max Pain area so there could be some effort to halt declines here and stage a rally for tomorrow expiry. So use intra day lows today to cover shorts.

As mentioned in the earlier note the Bank Nifty hit down to 39308 so far and the long put trade advised moved up in value by about 150 points!.
Bearish grip continues and no point in going against the trend.

KPIT Technologies has grown EPS by 20% per year, compound, in the last three years.

KPIT TECH STOCK SURGES reasons could include:
-The newly acquired company Technica engineering looks to add at least 10% incremental revenues to FY24.
-Some of Technica clients are notable disruptors.

KPIT Technologies has grown EPS by 20% per year, compound, in the last three years. The company trades on a very high multiple of (past) earnings.
The company's growing earnings per share (EPS) looks long enough, its share price should eventually follow.
In the current bearish market, the stock shows potential to inch towards its previously achieved all-time high.

The important trigger point at 38800 was broken and thereafter the market has remained under pressure. Prices are now heading for a challenge of yesterday lows and I reckon those might break as well. In the morning rally, confidence of buyers returned and lots of shorts were covered. Now market may fall more easily without the cushion of short covering. No longs are advised in any stock and instead one should look for short candidates.
Even if you are ok with holding the long position you have, it may still be worthwhile selling and buying it back on an intra day basis. This should improve your prices.
I feel 38500Pe has been added today, playing for the upside. I would buy that for a end of day dip in prices. Cmp is 305 and one can keep a 50-100 point stop on the trade. I see next support for BN could be around 38300 areas.

The start has been better than expected and led to some short covering in stocks and indices. But follow up buying has not occurred so market has wilted a bit at the higher levels of the day. Short covering was brisk in Bank Nifty compared to the Nifty and it would now require BN to fall below 38800 to signal weakness. Until then fresh shorts are not indicated. Possibility of some ranging may be there so expect some active CE shorting in Bank nifty today. The Nifty is already loaded with call shorts.
Breadth situation is positive with a lot of greens but the bummer is that no leader stock is in the gainer list. Hence it is likely that most of it is short cover plus some rollover plus some retail activity. Unlikely to produce trends.
The indices are undergoing the first round of long position trimming and how this gets handled will decide the course of the rest of the day.

Commodities Slump!
Should help tame inflation everywhere?

Gold at 2.5-year low
Oil at 8-month low
Aluminum at 20-month low
Copper, Zinc at 2.5-month low
Palm oil at 21-month low
Cotton at 2-month low

In yesterday's note and the attached chart, I had mentioned that a break would take the Nifty into a bit of a perilous area where the next support is only around 16600 area and also, there being some chance of acceleration downward. We have seen that commence and if there is continued weakness today then we should persist with the bearish side. Nifty made a double low around 16980 levels and a break of that would signal fresh declines. So fresh short entries should be on that signal. For BNF, such a level would be around 38550-600 zone.
But for starters, the Sgx is trading slight positive so it may take a little while to see the break. The earlier the low breaks, the more bearish the sentiment- just remember that.
Continued good tidings on the oil front as prices drop. But rise of the Dollar is relentless as of now. RBI has pulled back from selling Dollars to stem the slide. All global currencies are hitting their multi year lows against the Dollar right now. So long as that continues, there is little chance of the market going higher.
FIIs are back on sell side. Yesterday figure was large. 11k cr selling is large. Not happy with that and if it continues with larger figures, then it may pose a bearish risk.

JK Paper is the largest integrated paper manufacturer in the country with an annual capacity of over 7.6 lakh tonnes of paper.
While the Indian paper industry was amongst the worst affected post-Covid lockdowns, its fortunes have steadily improved in the last one year, from the FY21 lows. Demand pick up, coupled with higher realisation and has helped the company's strong performance over the last few quarters and the same is expected to continue.

JK Paper's recent capacity expansions, back ward integration and de leveraging of balance sheet will also contribute to improved performance. On a trailing twelve-month earnings basis, the stock trades 9.3 times, compared to 14.6 times for the industry.
The company is seen to have an increasing earnings along with price, however the PE seems to yet reflect the effects of the same.
The stock seems to be great option for positional traders.

Suzlon Energy Ltd announced that the board had approved raising up to Rs 1,200 crore via a rights issue.
The company will raise Rs 1,200 crore through the issuance of 240 crore shares with a face value of Rs 2 each at an issue price of Rs 5 per share.
Five rights equity shares will be issued for every 21 fully paid-up equity shares held by the eligible shareholders of the company.
Suzlon shares were trading 5.61 percent down at Rs 8.58, the stock is experiencing some reaction towards the gap support.
The stock has retraced the recent uptrend and is treading around support (8.60), the momentum is yet to be retraced. This looks like a critical range for the stock.

The trading pattern post open has been about continued weakness and both indices remain pressured. Rallies should be used to initiate sells. Too many people in WA groups are still looking for buying opportunities. The pattern of the fall is quite different from previous attempts. Earlier, the market used to open weak and then progressively make its way higher. Today, it has done the opposite. Last three sessions are showing price damage and that testifies to some selling rather than just profit taking on longs. People may still be trapped with pending longs, especially in stock futures, and that will be an overhang as we move towards expiry. Breadth is decidedly bearish and hasnt improved at all post open, showing that no buying has come in. Therefore, progressively thru the day, I would expect weakness to continue. Dont bother putting support levels in the way- they will only make you do some averaging or prevent you from selling. Let the system get cleared out of weak hands- only then will market attempt to go higher.
Had recommended ATM puts. The gap down changed the ATM levels, thats all. The advise remained the same. it still remains the same.

Sgx points south for the start and 17250 is a kind of a former demand area and hence we need to check whether this holds.
On the attached chart I have marked horizontal bands which are former gap zones. There are a few as can be seen.
If 17290 levels are lost, then the next gap support zone is around 16600 levels only! Note that there are 3 vertical back to back gaps in that zone and typically, these can become air pockets for the price moves and that can prove to be a nasty piece of work. We need to watch our for this in the week ahead. During that time prices went up from 16600 to 17300 in 3 sessions! We certainly dont want something like that to repeat to the downside for sure!

If the market is weak, dont stand around asking questions or scratching your head. Exit longs to start. Then take shorts if it works for you. Long 39500/17300 (atm) are recommended as buys, to be held.

Here is a link for reading something interesting on how the world dealt with a runaway Dollar back in 1985.

https://tinyurl.com/2xubddct

Copy paste this url to access the article.

Usually, we find that price moves in segments of equal dimensions. One of the ways I track markets it to check for duplication of initial impulses. I find that the UsdInr pair has now moved to a precise projection length using the initial impulse of the rise from the 2007 bottom. These are marked as segments 1,2 and 3 on the chart. One can note that it takes some considerable effort for prices to break thru such measured moves and this is what I expect may happen ahead. The sentiment towards the pair is at its worst now and fears about runaway moves in the Dollar are spooking traders and hedgers.
Continued momentum could see the weakness progress towards 8150 levels but we should see prices slip into a consolidation or even a pullback thereafter towards 8030 or even 7965 in the coming weeks.

Good news for India as Crude prices plummet. In addition, we also had Russia supplying us with cheaper crude, leading to a saving of 35000cr as per news reports. Both of these are good developments for India, taking pressure away from import bills.
Crude fall now has been in progress for 15 weeks or so and has recede from around $125 to the current $78 levels. The 50% retracement level of the entire rise from the Apr2020 low to Mar2022 high is at $74. The 200 period EMA is around $72. So, we should soon be headed into some support zones for crude futures. But chances are that rallies were remain limited and hence we may probably enjoy some docile times with regard to oil prices.
MCX crude hits 50% support at 6280 (cmp 6426) and could see a rally to 7340 levels as a part of a correction of the decline over multiple weeks. Rallies remain sells in crude futures for traders.

In an attempt to consolidate its metal business, the Tata Group on Friday announced the merger of seven of its metal companies into Tata Steel.

The board of Tata Steel approved the amalgamation of seven of its subsidiaries -
Tata Steel Long Products, Tata Metaliks, The Tinplate Company of India, TRF, Indian Steel & Wire Products, Tata Steel Mining and S&T Mining into and with its parent company Tata Steel.
Tata Steel said that the proposed amalgamation is aimed at driving synergies, simplifying the group holding and management structure, and consolidating and strategically growing downstream operations and engineering capabilities.
As a result, a huge opening gap can be seen today hence, the stock is experiencing some reaction towards the gap support.
The news helped the stock to sustain in the falling market trends and prove its strength.

Downside pressure continues from yesterday. Resistance levels for today were not even approached and prices are in the process of breaking near term supports. In Bank Nifty the big bullish candle of 14 Sep that sent prices to a new high has been compromised and its low broken. 39725/39215 are next levels of support. All major bank names were down yesterday itself and that seems to continue into today. Coming to a bit of a rescue of the Nifty today are tech stocks- on the back of some good numbers from Accenture yesterday. Hopes of business revival coupled with some defensive posturing is leading to some buying. Possibly a lot of short covering going on here as Tech had become a favorite whipping boy of late.
But looking at breadth, it is seen that bearishness has only increased post open so no saviors in sight for today. Intra day rallies will therefore present selling opportunities for day traders. Obviously then, long positions if any, need to be reassessed by traders as to whether to hold or fold. Not unexpectedly, financial services are the worst affected. More than banks, it is the financial services stocks that are taking a knock today. Definitely look to sell any intra day recovery there.

More than one third of the FPI, which was around 12000 crores in the first two weeks of September went into financial services stocks. They attracted flows worth Rs. 5,335 crore. As of September 15, 2022, FPI allocation in financials rose to 31.94 percent.
The stocks faring the best in this sector include TATAINVEST which has hit a 52 week high and gained a huge momentum in September, however is now undergoing some profit booking.
Another exceptional stock in the sector is PILANI INVESTMENTS, it seems to be testing previous highs occurred during the year.

MF SIP is seeing a big upward swing in the last 4 months as the markets looked up quite significantly. The strong run-up seen in the market since the June lows formed good support around 15000 and Bank Nifty around 32000 has been quite prolific. However, with global cues continuing to remain muted the upward traction seems restricted.

However, the recent inflows have crossed the 12000 crore mark per month and the SIP assets under management (AUM) climbed to 6.4 lakh crore which is a 30% growth, which is twice as fast compared to the industry standard.

Industry experts of 43 mutual fund houses that are depending on SIP for inflows are positive that if the trend in such a scenario improves there is scope for heightened acceleration of flows in the coming months.

City gas Distributors (CGD) may be about to witness a shift in their trends as the scenario post the sharp drop escalated by Russia war could now be coming to a halt. The fears of supply disruption etc that were plaguing the listed names like Mahanagara gas, Indraprastha Gas, and Gujarat gas could now see some new demand emerging.

Transporters using Compressed natural gas (CNG) cant switch to more expensive petrol and diesel. Households also cannot switch. With the government's policy of pushing the gas component in the energy mix, there will be policy support as CGDplayers expand their geographical networks.

IGL, MGL, and GGL have invested in CAPEX to expand growth. Their balance sheets have minimal debt as they have strong cash flows to aid their operations. The authorization for CGD expansion has been extended to 295 geographical areas covering 95% of India's population.

Amongst the names mentioned from a medium-term perspective Gujarat Gas and Mahanagar Gas after the recent correction have the potential to head higher. One should track these names in the coming weeks from a medium-term perspective.

The expected 75bps were delivered and markets are down some. Sgx is expected to open with a gap down. Yesterday note mentioned a support near 17640 but this seems set to go based on the morning levels of the Sgx. The next drop should be to the level around 17400. Can we make a stand at those levels? Using Time, I find that if this low were to be made around 1.15pm, it may be a good match with the price. Alternative, if the support zone is hit within the first 30 minutes, then too, we will have a price-time match and hence can consider making a stance.
The same news will not keep showing the same impact repeatedly. The Fed hikes is now accepted as a fact. Other European banks are also getting into the act and hence for the balance of the week we should hear of more rate hikes by other countries (Sweden, Switzerland, BoJ etc). The market digests all these and moves on to the next item. Unfortunately, we dont have any local news to counteract the flow of negatives from overseas. I wrote about this point in earlier posts also. Hence we may remain in a corrective phase for a while- probably till around the 5th of October wich is looming as the next big turn date. Rallies shall therefore run out of fuel in the 17650-850 zone today and ahead until the turn date.
Look for Bank Nifty to lead the bottoming process (if that has to happen today) by making a low ahead in time (around 11.15 or so). Yesterday I wrote that the zone around 40000 should be a support. Possibly, the open itself may be down into zone hence we need to look lower for a price match and these would be 39920/39130. If today's bottomgin time window is missed then the next time counts are set for 27th and then Oct 3.
Fresh trading positions should be taken after checking for market turns in the Bank Nifty.

In an earlier stated Insight posted on 13-Sept cued a growth trend of PNB housing within the following week, the stock rallied up to Rs.447 from Rs.388 in a span of 7 days. It scaled a growth of over 13 percent.
The stock is currently undergoing profit booking and hence showing signs of decline at 421. Hence, it would be a good time to exit and not engage.

The Indian chemical industry had a market value of USD 178 billion in 2019 and s anticipated to reach USD 300 billion by 2025 with a CAGR of 9.3 percent. This industry significantly boosts the national economy. Up to 100 percent of foreign direct investments are allowed in the chemical industry.
India is ranked sixth in the world for chemical imports and eleventh for chemical exports. The major stocks in this sector include AARTIIND, DEEPAKNTR, FLOUROCHEM, SOLARINDS, and TATACHEM.
Among these, AARTIIND and TATACHEM shows potential.
AARTIIND seems to be testing the previous high of 1000 and TATACHEM shows potential as it seem to be touching previous highs, however needs some tailwinds to confirm the expected growth.

Charts of the three stocks mentioned in the earlier post, along with Biocon which had some specific news yesterday. Usually, I dont like trading in Biocon as it is one of the dogs in the sector. But the news regarding Biosimilars licensing could create some rally in the stock. Keep a tight stop if bought.
Note that the other three stocks (Cipla, Sun and Laurus) all have a rising liner regression slope and all are signaling intent to scale up to the top of the channel. Biocon is in a down channel but the top of this channel si around 310 and that is enough room for a trade. Cipla has pushed to all time new highs but here too, only the patient traders make money, as the stock tends to tire out its trading holders. Sun Pharma is a better a trading counter but then an alltime high is an important event too. So, Cipla.

A surprise winner yesterday was the Pharma sector. Seems like some value hunting work in the sector. We saw a bounce in the Pharma index and its main resistance trendline lies 2-3% above current levels, so there could be room for main stocks to advance further. Stocks that clearly out perform the sector index are Cipla, Sun Pharma with Laurus Labs a distant third. The rest of the leaders bunched up as under performers. So the ones named are the only ones to trade or invest right now.

Markets went up yesterday locally and in the US, despite the fact that the important Fed meet is set for today. We will have an impact at the SGX in the evening which will translate into our markets only tomorrow. Options positions will be created ahead. With IVs down over the past couple of sessions, it seems sensible to create long straddles or strangles today.
FII and DII were seen buyers yesterday. Mid and Small cap indices also went up. So there doesnt seem to be too much nervousness in the market. Upto 75bps hike by the Fed may well be already factored into the prices, it seems. Barring some wild commentary, markets seem to ready to see off this event as well.
Nifty has a gap in the 17625-700 area and that can be kept as the lower support area that should not be lost. If it is, then a linear regression slope upward may also start weakening. A similar support zone for the Bank Nifty would be in the 40000-40400 zone. Break of these should shift the bias downward for the day and ahead. On the upside, one is happy to take whatever the market is willing to give (because the path of least resistance continues to be upward).
In a separate post I have written about Pharma sector rally. That may be an area to focus for today. IT sector on the other hand is only too ready to give up its attempts to rise at the slightest nudge. Any bottom fishing should be avoided here and rallies can be used to short or to have hedge in stocks here against other longs.

The pandemic-induced lockdown caused widespread business disruption. The automobile sector, in particular, suffered a daily output loss of between Rs. 1000 and Rs.1200 crore during the lockdown.
Schaeffer’s performance has however gradually increased following a drop brought on by lockdown caused in the pandemic in Q2CY20. The firm generated revenue of Rs. 5560 crore in CY21. The recent Q2CY22 saw a rise of 42 percent in its revenue over the prior year same period and around 11 percent growth.
Schaeffler India exports industrial bearings to its parent entities.
Strong focus on product innovations (157 patent applications in five years), introduction of localised products are likely to aid business growth in export geographies. Besides, favourable cost structure in India, the parent's diversification supplier base from China are other positives. Exports improved adding to ROI.
The company is trading with a P/E ratio of 34X.

India ranks high on a list of Emerging markets on vulnerability to economic risk factors based on a strong Dollar.
This is one more reason to be bullish on India as FPI money will certainly seek us out in the future.

Today's higher open would have come as a relief to beleagured bulls. The breadth at the start of the day is strongly bullish. It is evident that not much of Btst longs are present in the system so immediate profit taking is not seen yet. however, I do feel that there are many trapped longs in stocks from last week and their overhang will ensure that price rise will be a bit slow. Also I dont find any specific news flow that can create or sustain some big buying today. Perhaps market may be drawing some solace from the drying up of short term liquidity as a signal that rate hikes may be postponed? I would choose to wait for signals to emerge rather than rush out and buy the good open. Short covering is visible in sectors like IT and Metals. Buying is seen in banks and financials.
For indices I feel 41650/17930 are the two immediate resistance levels that need to be recaptured and held for bulls to extend their sway today. I would want to participate in the long side only if that happens. On stocks I would prefer to go with some flow or news evidence and hence it would be quite stock specific. Axis Bank and Indus Ind look to be resuming their uptrend.

FPI take a breather in their fund infusion in September. The figure in the current month stands at 12000 Cr compared to 51000 Cr in the entire August. One of the prime reasons has been the fallout of the US Fed meet scheduled later this week.

US markets are currently undergoing a lot of anxiety as the recent inflation numbers have dashed hopes that the US Fed could take a breather in September and ease up on the interest rate hikes.

Further, infusion from the FPI is now hinging on the FOMC meeting. The current trends seen in Indian markets had a strong tailwind. With the overall situation remaining neutral we need to see how the markets would hold on to the recent gains made.

Improvement in demand from auto-makers on easing chip supplies, steady replacement sales, and margin recovery hopes from Q3FY23 are the key triggers that fuelled the rally.
Ceat led the rally in tyre stocks gaining over 20 per cent in trade on Thursday even as the broader markets ended in negative territory. Its peer, JK Tyre & Industries, was up 17.6 per cent, while market leaders MRF and Apollo Tyres were up 7.8 per cent and 6.6 per cent respectively.
Further, for Ceat, the quantum of capital expenditure (capex) is expected to come down going ahead and investments done so far would start yielding results.
Ceat, which reported operating profit margin of 5.9 per cent in Q1FY23, expects margins to improve to sustain able levels of 10-12 per cent in the medium term.

On the demand front, while the improving semiconductor supply is helping boost sales to auto-makers, the replacement segment has been impacted by weak rural demand.

The company is eyeing a higher market share (18-20 per cent) in the passenger car radial segment after gaining 500 basis points market share since FY17 and ending FY22 with a share of 13 per cent.

Figures issued by the Telecom Regulatory Authority of India (Trai) on Thursday revealed Mukesh Ambani-led Reliance Jio solidified its position as the market leader in the Indian telecom sector by adding 2.94 million mobile users. In June, the company added 4.2 million new users.
In the meantime, Bharti Airtel, managed by Sunil Mittal, added 0.5 million customers in the statistics revealed July. In the meantime, in July, Vodafone Idea lost 1.54 million subscribers. In the meantime, the government-owned MTNL and BSNL respectively lost 1,327,999 and 3,038 wireless users.
As other companies lose subscribers, RELIANCE and BHARTIAIRTEL seems like good stocks to shift to in the telecom sector.

Adani Ports and Special Economic Zone (SEZ) shares gave up initial gains amid volatile trade on Friday, a day after the Adani group company's unit, HDC Bulk Terminal, signed a concession agreement with Syama Prasad Mookerjee Port in Kolkata for the mechanisation of Berth 2 at Haldia Port.
Adani Ports shares dropped by as much as Rs 14.5 the stock nearly gave up the entire gain of the previous day. Adani Ports had emerged a successful bidder for the project in February.
Positive on the company's plan to leverage its strong balance sheet to benefit from a gradual recovery in volumes, It is believed that the company's double-digit growth should continue in the medium term.

Some news for sure out there for Tire stock. Look at the attached chart- all major names are up, up and away.
If one wants to bottom fish, you have Balkrishna (which is a leader stock!) that may rally. Big range breakouts in others. Surely more to come here.
Associated stocks like Carbon black items (Goa Carbon, PCBL, HSCL etc are also running).

18000 long straddle this morning was quoting at 104 for the Call and 28 for the Put. The prices were in range of previous levels and hence the trade could be taken.
I had mentioned that one should use the price and time cues given to take a view on directionality. Accordingly, the long CE should have been sold at the beraish signal at 10am. The price then was quoting around 40. So one would have incurred a loss of about 65 points on the long CE. By then the PE had moved up strongly to 148. The profit available at that time on the long PE position was 120 points. Thus the entire position could have been squared at a profit of about 50-60 points.

The Bank Nifty was up and running from the start and a straddle was recommended at 200 levels but prices were much off from this and hence no trade was possible.

In the morning note I had mentioned a time count at 10am and stated that if the low of 17990 breaks around that time we should see more declines. The Nifty broke this support zone exactly at 9.55am and headed lower to 17866- a 100 point move that occurred in the next 45 minutes!
Bank Nifty broke above the previous day high early in the day and has managed to hold above the support area given at 40960. Hence BNF is out performing the NF as of today.
Now the next time window is around 1pm today. We have to watch the Nifty for a rally into that time zone perhaps -which may fail to hold- leading to fresh declines into the end of the day.
We also need to see if the BNF breaks the low defined above at the second time zone which also would mean a weak expiry today.
As things stand now, upward bias will be considered only if there is any robust advances around the second time zone of today.

Call addition seen at 18200/18300 would suggest that traders expect a rise into zones to be the max. My projected target zone is also at 18300 area. Put additions near the money is not seen in Nifty but starts a bit lower so maybe players are being a bit cautious here. Max pain is at 18000 so we should watch the position there to see how expiry will lean- since it has almost equal size of calls and puts at the start today.
In Bank Nifty the big support strike moved to 40500 and good additions to 41000Pe also occurred yesterday. No major call additions seen so it seems that market men are hopeful of more gains in the Bank Nifty compared to the Nifty. The Maxpain here is at 41200, which is well above the support strikes as well. Noting that PCR is very high here at 1.69 so there is some need for attention.
If one wants to play for the expiry today then a long straddle of 18000 (buy Ce buy PE- total premium as per Ltp is 160, keep stop at 100) or BNF long strangle 41500Ce and 40500Pe ( total prem 205, stop 105). This punts for a large move during the day. Use the price stops and time counts I have given in the earlier post today as additional indicators of direction emerging.

In yesterday pre market note I had mentioned two levels (17855 and 40200) and how they needed to be held or crossed over for bulls to continue to hold the fort. The lows for the day were around these levels and then the market just turned around and kept going all day long. We finished well too and the Sgx is showing a positive for today as well so it seems that the bears got kicked out. In the follow up note I reiterated the bullish view for the balance of the day. So, now what lies in store for us today and ahead?
Two important time elements for today. If the NF breaks 17970 by 10am then there could be some pullbacks. For moving higher, the NF has cross above yesterday high of 18110 by 1 pm. Lets watch the price action around those time zones for today. The two price levels and the time zones can act as stop or breakout points. Note that the time zone is interchangeable for breakout in either direction.
Why this additinoal caution for today (of providing intra day time zones)? It is because there is a sentiment surge that may start impacting the trends. A cursory checks across many active trading desks yesterday revealed that almost everyone is facing trading limit problems. This means that traders are in full flow and possibly up to their eyeballs in positions. If everyone is already in, then who is to further the trend? So, it is being done as a matter of caution.
Similar levels for Bank Nifty are 40960 for down break and 41660 for up break. Time counts are same for the BNF as well.

Market sprang a surprise when it opened much better than feared. Although there was a cut, it does not seem to have dented the enthusiasm of the players. Right off the bat, I am seeing new additions to 40000 and 40500Pe in Bank nifty. There is unwinding in the strikes that became ITM because of the gap down but no sense of panic at all. Put additions are much larger than unwinds so clearly, the mood continues to remain bullish.
The Neotrader Dashboard shows me that breadth is not really a washout as one would have expected and save for IT, most other sectors are seeing small changes as yet. Even in IT, I find that post open, prices are improving a bit so short covering is surely on. No panic is seen in Mid or Small cap areas even as they slip a bit into the red. Breadth improvement is startling post open and can be seen in the attached chart. It tells the whole story. Clearly, bulls are not shaken yet.

We seem set for a rout at the open as the Sgx is pointing at 335 point cut. We had a similar deep gash down on Aug 29 but that gap was consumed soon after the open. If something like that doesnt happen then the narrative may be shifting. Main cause has been inflation prints in the US that came in higher and alongside we also printed slightly higher. Macro fears breeds faster panics that tend to persist.
On the way down, one Nifty fut number I make is 17855. Sgx is pointing to a trade below this as a start. Hence we need to see this level being crossed and held for bulls to hold the fort. If not then this becomes a pivot point for the immediate trend. Lower level below would be 17590 where we can expect bulls to make a stand. Unless the narrative shifts, I dont want to move away from the ongoing bullish stance that I have been maintaining for this rally. My take was for a rise to 18300 with the time element set for 13Sep. Now we reached the time count and today we are set for a drop. So perhaps we should decide later in the day whether the time element won out.
Heavy put shorts exist in the Nifty but not so much in BNifty. Hence the Nifty fall may be sharper and could continue thru the day. We could see all sorts of position adjustments occur through the day and that may obscure clarity about the intra day trends. For BNF, two values to look at would be 40200 and 39800. Largest put OI is seen at 40000 strike so there may be an attempt to hold the market above it.

Super move in PNB Housing.

There was a time when people were scrambling for this stock in the market and it notched up a high of 1717 back in Aug2017. From there the stock hurtled its way down as disappointed sellers dumped it until it hit some 311 in May22. since then the prices have been looking up very slowly. On the chart we can note some interesting volume behaviour. There is a high volume reversal followed by several spike higher each of which has been on high volumes (circled). It seems like buying may be returning to the counter. Momentum is also picking up slowly. Seems worth a multi week investment at the current levels of 388

In the morning note I had specifically mentioned about a couple of stocks Deepak Nitr and Gnfc. Both have been faring great during the day. Also had suggested long positions in Realty. Godrej Prop is running away right now. DLF has started moving well too. Both stocks are on breakout mode.

Today's move in Ambuja Cements is a complete surprise. The stock was making strong strides in the earlier week, the stock moved higher by 16% before closing the week at about 9% higher. More intersting was the fact that the Open interest in the futures jumped towards the end of the August expiry, was rolled over and has continued to stay high all through. In fact, on Friday, the stock slipped into futures ban as it moved past the Mwpl limits. Hence it was expected that the price action may be subdued today (usually stocks become quiet during ban periods as volumes drop).
However, the stock seems to be supercharged instead, and has shot up after a brief dip near the open on high volumes and high momentum. Given that stock is in futures ban, this can happen only if there is delivery based buying in progress. Coming on top of the large move of the last week, there seems to be some news or event that is driving the moves. Similar big moves are seen in ACC as well but not in the other cement counters. Therefore it has to be something related to the Adani open offer. Clearly, they are not going to get the stocks at the prices they have offered so maybe revised higher offers are coming?

Nifty trading better compared to the BNifty from the open today. That is a departure from earlier weeks. So we should now switch to looking at Nifty heavies to perform. IT majors are up so that should help. Axis Bk is the only one that is up so no help may be forthcoming from Banking group today. So, we have to look at IT to lead the charge for the Nifty today. Not the best of situation as that sector is still struggling to get into even a rally yet. So, we should perhaps be looking for a narrower move day, one where we may have to be satisfied with small range of profis. The flip side is that market may not move down much either so no real need to have very tight stops.
New joinees in the upward action today seem to be Gnfc and Deepak Nitr, both seen in action after quite a while. Must be some stock specific thing or news related. HAL continues on the back of order wins and low ownership and high pedigree. Adani Ports continues to perform. Realty names are trying to look up so can chance one's arm over there for some long positions.
On the losing side there doesnt seem to be any sector bias and the list is just all over the place. So seems like a very trader-oriented thing.

On the chart of BTC, we find the prices have dropped to the 78.6% retracement. The prices have also reached the double arc support as well and we have a nice looking bullish candle.
So it is possible that we may see some rally after the sustained decline we have seen in the past few months.
A report recently showed that India has the HIGHEST ownership of crypto assets! Imagine the money that is stuck! Any rally in prices will come as a huge relief for many crypto traders and perhaps release money that may find its way into stock markets!

On an earlier Insight dated 25-August stated an expected upward movement in the sugar industry.
The stocks mentioned in the insights namely BALRAMCHIN and TRIVENI has seen a rise of 10% which proved to be beneficial for traders.
The same can be seen in the recent markets which included sugar stocks like:
Balrampur Chini Mills, Triveni Engineering & Industries, Avadh Sugar & Energy, Dalmia Bharat Sugar and Industries, Dwarikesh Sugar Industries, Uttam Sugar Mills, Shree Renuka Sugars and Vishwaraj Sugar Industries.
All of these stated stocks have seen a boom recently. The sudden rise in the sugar stocks could be due to the Govt.’s plans to export sugar.
The central government may be looking at a policy to allow exports of around 8 mt of the sweetener in two tranches. In the first tranche, market sources said exports of around 5 mt could be permitted. This could be expanded by another 2.5-3 mt only after assessing the price situation and supply along with the sugar exports demand scenario.
Hence this proves to be an opportunistic situations for traders and investors in the mentioned stocks.

Defence stocks are once again as the government announced last week by the defence ministry about the increasing role of domestic manufacturers in satisfying the demand. The effort is being initiated to curb imports.

Despite a shortage seen in The last few months have clearly seen a sharp upside due to the stocks rerating. The trends in the majors like BEL,BDL and HAL has been quite prominent. Now, the rub-off effect on the smaller names like Data Patterns, MTAR Technologies,Paras Defence etc. is now beginning to influence the prices higher. With the improving outlook given strong visibility on orders and earning growth over the next two years.

The stocks that should be on the radar should be BEL (largest listed defence player) , BDL (sole supplier of variety of indigenious aircrafts) and HAL (Aircraft manufacturer) as they will be leading from the front based on the vibes generated from this move.

Bollywood is going through a crisis and this needs some urgent attention. The annualized revenue of listed movie exhibitors, distributors, and producers is 38% below pre-COVID levels.

On a comparison between five of the listed companies that largely depend on Bollywood movies for a bulk of their revenues, we found that the trends are struggling.

While the villains are said to be the lockdowns, lack of new content and growing competition from streaming and OTT platforms there is a definite lack of demand for these stocks. With the near-term outlook remaining bleak the prices are currently struggling as we can see from the setup shown on the charts.

Amongst them we find that lesser known Mukta Arts and Eros Media are performing better amongs the peers (Refer Chart) and could be an interesting play for the next few weeks from a short term investing perspective.

Pidilite has been a major outperformer in the last few years and have shown consistent gains in the last 3 months. Some of the prime reasons for their gains have been due to falling raw material prices combined with growth in new categories that have improved their distribution reach.



All this has also prompted to some earning upgrades by brokerage houses that could augur well for the prices.

As far as the charts are concerned the rise in the last two months have been exceptional, a nearly 40% rise seen in the prices is the testament to continued buying interest. While prospects of moving higher is very much on the cards we need to parcel our approach. Immediate supports lie at 2600 and can be tracked as a good demand zone in teh comng days. On the upside we can consider 3500 in the next six months.

Notable event of yesterday was the Bank Nifty tapping above 40k levels to record 40174. The only problem with this was the fact that this happened right into the first 5 min of the day and post that, although the index tried, it could now work up the same fervor and ended the day near the lower levels of the day. It doesn't look any worse on the daily charts though so it would require much more than what selling we saw yesterday in Bank Nifty. More bearish action was visible on the Nifty and here we find unwinding of 17600 PE and when you see this along with the fact that calls of 17700/800 and that kind of tells us that Nifty may be under pressure today. FII were long puts and I see rise in OI of 40000 PE and CE so maybe they have sold futures and hedged thru a long straddle at 40000? If so, we should see reduction in OI of 40k CE as they unwind one side of the straddle.
SGX at the time of writing is down and so is the Dow futures. If prices open weak and continue lower, then we may see 17720 area becoming a good resistance for the rest of the week. Then 17250 may become visible. An important low would be 17440 and active traders may look at that level as a fulcrum point for today. If bulls are to win the day, they will have to hold the NF above this level. A similar fulcrum for the Bank Nifty would be at 38600.
A closer level to watch would be 38800 for the BN and 17550 for Nifty. These are levels for active day traders.
Option players could switch to shorting Nifty higher calls if weakness shows for the day.

Sometimes market men get into a diversification spree and start putting money into whatever is fashionable. One such area was Global Funds. As markets fared well in the last couple of years, all MF houses launched their global fund offering and it was lapped by large HNI players who felt that it was time for them to go international! A total of 69 global funds are in the market with about 50 of them born in the last one year alone. Now, it is interesting to note that 48 of these 50 funds have negative returns! So, this ploy has gone bust and it is a lesson that poorly thought out strategies - whether in trading or in investing- will kick you in the teeth. Now, it is a different matter that wealthy investors can afford this lack of return because the investment may be just a small portion of their overall holding. But for the smaller investors who got carried away by the hype and misplaced confidence in popular names like Google and Amazon and Netflix, it would be a very sobering effect because the lack of return would probably create a dent in their overall returns. Best to stick to local shores, for smaller investors.

Sgx is mild positive so no scares at the open. Bank Nifty was in good form, as had been expected. The BNF/NF ratio continues to point towards an out performance from the BNF. The index began well and stayed steady thru the day and finished the day well too. The leading lights of the BN are all well placed on their individual charts to keep the trends ticking on the index. While these stocks will also help the Nifty, there is help coming through from ITC and L&T for the index with Reliance rallying from support as well. Among metals Jsw Steel was quite spiffy and was a good contributor for the Nifty yesterday. Overall it appears that market may choose to continue higher than suffer any reactions today. Seems like BN at 40k is being hoisted before NF at 18K! Concentrate on BN opportunities today. 39700-750 area should provide support during intra day dips if any. On a rise 40700 would be the price to aim for. Shorting 39000 PE is seen. For Nifty 17600-650 area would be the buy-dip zone. Above 17725 we could see some drive in Nifty that can carry it towards 17850 area. Put writing seen till 17500 strike so if inclined to short Puts then it should be 17400 strikes. If prices rise then one can move the strike up as well.

Foreign investors have pumped in a little more than ₹51,200 crore into the equity markets in August, making it the highest inflow in 20 months, amid improving risk sentiment and stabilisation in oil prices.
FPIs pumped in a net amount of ₹51,204 crore into equities during August, according to data with depositories.
This was the highest investment by foreign investors since December 2020, when they had infused a net ₹62,016 crore in equities.

Some relief as the festive season is right around the corner, the Indian Auto industry is witnessing a high demand for private two-wheelers and four-wheelers. As chip shortage eases its grip on the industry we are finding car brands like Maruti Suzuki, Tata Motors, Mahindra & Mahindra and Kia have seen substantial improvement in their monthly vehicle dispatch for the domestic market. The two-wheeler companies,Escorts, Bajaj and TVS recorded a YoY hike of 61% ,48% and 33%, respectively, for the month of August.

Moving to the chart setup we find that the Escorts at 2032 look well placed in the two-wheeler segment and Mahindra & Mahindra at 1322 from the passenger vehicle segment looks to extend their positive momentum. One should track these stocks for the next few weeks.

In line with then market grapevine that I had posted earlier, Fed Bank has officially issued a denial of any merger plans. So, that is that.

With second tier banks now on the move rather aggressively, one of the long awaited moves is now seen happening in Idfc First Bank. Ever since the management stated that the Bank will no longer show losses, the market has been enthusiastic to get into it.
Prices are displaying what seems like the first of the impulse wave upward. This has targets up to 54 or 59.
One can remain long or use intra week dips to buy into it on a positional trade basis.

A couple of weeks ago I had mentioned that Fed Bk would be a good positional play. The price back then was around 105. Today it is riding high at 125 levels.
Market grapevine now bruits about a possible merger with Kotak Bank! Reason advanced is that it will be a good way of Uday Kotak to reduce his percentage holding in Kotak Bk thru such a merger! Not bad as a reasoning and we have heard worse things in the market!
Be that as it may, stock is on a roll and may have room till about 134 yet. Dips continue to remain buys. Now that a rumor has been floated, traders will at least have a " reason" to buy!!

Domestic equity markets open lower on Monday morning amid deepening concerns over the European gas crisis and a mixed set of jobs data released in the US on Friday. Wall Street stocks closed lower on Friday while cues from Asia were unsupportive.
Few other reasons involve:
-SGX Nifty signals a tepid start.

-Asian markets fall in early trade
-Oil jumps 1% ahead of OPEC meet
-News that Russia has scrapped a Saturday deadline to resume flows via a major gas supply route to Germany has deepened Europe's difficulties in securing winter fuel, souring investor sentiment globally.

-DIIs sell equities worth Rs 669 crore

-The Indian rupee declined on Friday as the dollar climbed after data showed the labour market remained strong in the United States.

Two day similar range with the move confined within the Tuesday giant bar makes the odds for the day about the same for both the sides for today. Simple way to resolve this would be to keep the 2-day high-low as reference. This is at 17450-650 area. So for Nifty traders that should be a good reference point. But the real moves may be set by Bank Nifty. I think private banks are ready to move up and if that happens then the Nifty also will get dragged higher. So today I would draw views from how Bank Nifty moves and choose to trade that index in preference to Nifty.
BNF is a buy once 39775 is exceeded. Keep an eye on Icici Bk, Hdfc Bk and IndusInd bk are the ones to watch for getting a clue on BNF moves. Keep a stop at 39000 and if this breaks then abandon the bullish trades.
Not really finding any significant option writing in either calls or puts in BNifty so new bias shall build today onwards. Hence watch intra day changes in the options OI in BNifty today.
Remember that Banks and financials are still 37% of the Nifty weight and hence strength there would drive the Nifty well. At the end of the week Icici and Hdfc Bank alone account for 50% move of Bank Nifty. So do watch these two.
Nifty has some calls written at higher strikes and hence progress may be slow. Lets watch the heavy weights of Nifty to set the ball rolling there, if at all.

The SGX ran a scare over the holiday as it showed a deep cut but by this morning, seems to have recovered all of it and is mildly negative. Much to the relief of all the bulls who had created longs on Tuesday on the basis of Indian markets ignoring Jackson Hole completely.
The candle patterns for Tuesday were powerful bullish and if there is continuation above the highs of Tuesday then there may be no holding back the bulls. But I feel a tinge of fear would have been induced with the Sgx move down and hence traders may look to bail out of their longs rather than chance another gap on Monday. So, expect supply at higher levels. If the low of the first 30 min breaks, then it is better not to wait around expecting a rally in the latter part of the day.
If market gets into a slide then it may last a bit as there are no local triggers now for a while and we will become sensitised to global factors. Max pain is at 17500-600 area and for BNifty it is 39100-200 zone. Lots of call shorts were squeezed out on Tuesday. Now call shorts have moved away to 18000 and 40000 plus strikes. So they seem to be playing safe. Would it now be the turn of Put sellers to get squeezed again? PCR at 1.2/1.52 for the two indices shows that losses of Tuesday are trying to be recoverd from Put shorting. If market falls today, then expiry hour can see some put squeeze being applied. So avoid the buy-dips plan today. If you feel up to it, a long OTM put may be tried as an expiry trade today.
Question now is, should one go short if market falls? Answer is yes. List can include stocks that have overrun themselves and the weak sectors like IT and Pharma.

SHARES OF Syrma SGS Technlogy on Friday made a strong debut by ending 42 per cent higher. The stock closed at ₹313.05 on BSE and 312 at Nse vs IPO price of ₹220.
The ₹840-Crore public issue was subscribed over 32.6 times with a strong response from all categories of investors – QIB (87.56 times) HNIs (17.5 times) and retail (5.53 times).
From initial trades, it seems to suggest that more gains may occur as grey market trades get settled. Evidently, there are shorts in the system that need to get cleared out and settled.

Market trading well and indices moved clear past yesterday highs, signalling that market is ready to put the US Fed event behind it. Now, the next wicket to take would be the gap zone of yesterday- 17650/39160 area. If this can be reclaimed then we have succeeded in putting in yet another higher bottom.
On options front, the Put OI concentration in BNifty has moved up and on intra day basis even 38700 strikes are being sold. More put shorts are visible as of now so sentiment bias has shifted to up. In Nifty too one is seeing addition to Put Oi (17300) and hardly any to call OI. Instead one is seeing call short covering in strikes up to 17500. So, here too sentiment favours upside.
Around 39000 should be a test of the resolve of the bulls for today. So if they have to ensure that the low is made, then they need to haul the market above this level and hold it above. A similar level for the Nifty would be a bit higher- around 17220 levels. Hence it is better to follow the BNifty and check whether it is able to achieved the required levels. Nifty may then follow.
Dow futures are trading in the positive and there is some strengthening in the INR. Perhaps the RBI is at work today. The DXY is seen consolidating after it was rebuffed at an attempted breakout higher near 109.50. Crude is seen picking up trends once again. Gold remains flat while Bitcoin has improved a tad. Most of the global indicators are signalling that our markets may not really decline very much as of now.

FM Nirmala Sitharaman said "... estimates have also shown based on the developments, that we are definitely at that range... 7.4 (percent) and that level will continue even next year," She quoted the projections by the IMF and others for the growth figure. She said the IMF and the World Bank have projected India's growth to be the fastest for the next two fiscal years, and their estimates are in sync with that of the Reserve Bank of India as well (which has a 7.2% growth estimate).
If India is going to be one of the strong spots in global economy, then the weakness signaled by Fed speak and rate hikes and inflation in the US may not translate in a similar way to India. Yes, we may have knee-jerk reactions every now and then but we can expect the Indian economy and consequently the markets to remain robust and resilient. Lower levels will therefore continue to get bought into. Consensus on the Street is for a decline to 17000 levels or at worst, 16500. Such declines shall not dent the long-term trend.

Sgx points to a better start, possibly confirming that the low of yesterday morning may hold. As expected, the prices dropped down to levels where buying emerged rather than further selling. Weak hands were forced out during the rest of the day. Prices rallied to near 17500 area which is also the Max pain area on options. Lack of follow thru on selling at the Dow futures yesterday ensured that we would rally off the lows of the morning. But the Dow continues to hold max influnence over what shall happen today as well. Hence it is still the counter to watch for a clue on today's trends. The other element I had mentioned yesterday was FII selling. That was evident as they pressed 561cr sales. If this continues, then market will get spooked. The Rupee weakening to its lowest is also not helping matters. 81 seems to be on the cards here for the UsdInr pair. So chances are that weakening Inr may trip up FII buying mood.
In options, call shorts are now at 17500 levels while puts have marshaled their defense around the 17000 mark. Thsi range for options may persist for this week I think.

The flip side to this hangs on the moves in the Dow. Now that the event is over and the knee jerk to it has happened, the market shall be watching the progress now. Once the event has passed, a gap risk is almost eliminated. The position build was low going into the event and hence there is a possibility for a larger move emerging.

On Bank Nifty the call strike for resistance has dropped to 39000 while Put strike for support has receded to 37500. The additions on both sides yesterday appear to be similar so no definite directionality is visible as yet. So it seems likely that new positions are being built. If prices dont rally up beyond yesterday highs of 38560/17440 then chances are that fresh shorts are being built and we may see more declines from Thursday.

Markets opened as expected, with a deep cut. But since that opening, the first lows has not been broken and has been used to buy into by quick traders. Are we out of the woods then? Certainly not. The gains are still too tenuous for one to state emphatically that the decline induced by the Fed speak is done. The wide gap of today will continue to play its role ahead as resistance. Recall that in the last week too the marekt started the week with a down gap and spent the rest of the week dragging itself up to fill the gap and that was it. Now we have a similar situation again this Monday.
Stock specific activity will become the focus therefore. The only sector that is up today is Fmcg. Escorts and Bhel seem to be continuing their good work from the last week so those are totally unaffected by current sentiments. BEL and HAL are another two that are similarly placed. These appear to be decent bets if one wants to chance their arm with long positions. On the short side, IT was expected to fall and it has. Infy seems weak and can be shorted as can Mphasis. The rally in second tier banks seems to have halted and hence some profit booking going on there, evidently. Metals, that were in the process of rallying last week, have met with some renewed pressure.

US markets were about 3% down on Friday. Bitcoin, traded thru the weekend but still did not show any improvement.
Assuming a 2% knock here at the open, the Nifty should open around 350 points lower. So, that would put it around 17200 levels. This is where the KS line on the daily Ichimoku charts lies and hence can be a decent support. Below that may see some sharper drops as next set of supports are further away. So, active traders should ideally not wait to test the market's resolve to go lower further than 17200.
Similar levels for the Bank Nifty would be around 38300-400 area. A gap support exists in that zone and the last swing low is near 38K. The KS line on BNifty chart is at 37850 so that is still further away. For those with pending longs a stop at around 38300 should be the last level.
Put shorts exist at 17500 and those are going to panic. The next big build is only at 17000 and I expect that may probably get added to today. Call shorts are piled at 17700-800 and those may get wound down to 17600 during the day. Hence if one is looking to short calls, then 17500-600 ought to be the levels, as of now. If index breaks the starting low, then create Put spreads for the week, starting with an ITM Pe long.
For BNifty, the big call strike is at 39500 short and that may hold for now as resistance for the week. On the put side, 38000 may be the target zone if the collection of position at 38500 gives way. If that happens, create bear Put spreads.

Among stocks, IT and Pharma are the weak links as sectors and one can aim shorts at those areas. Will there be some 'defensive' buying in these? I doubt it because the two sectors have lost the confidence of the big players.

During the day one should watch the progress of the Dow futures and Bitcoin for some clues on sentiment overseas. Right now we are just reacting to their weakness. Soon as they change their stance, we will change twice as fast.

The open offer from Adani group for shares of ACC and Ambuja is open and will be open till Sep 9th. The open offer price is a margin 0.5% premium on ACC and about 3% premium on Ambuja prices. This is quite meagre and does not merit any consideration.
Looking at the fact that margins are pressured because of sharp increase in input costs (particularly crude), the results across the coming quarter or two may not be robust. Also, the current valuations of both stocks have run ahead of long term averages, as prices have run up in anticipation of the Adani buyout. ACC is trading at about 24x (long term avg 21x) while Ambuja is trading at 27x vs long term avg of 22x. Thus both stocks have over run themselves for the news or event.
It is better to sell the stocks in open market rather than tender in the offer.

Post the Powell-speak, the Sgx has taken a knock following the weakness in most markets. The bearish candle on the Sgx chart looks a nasty piece of work. If it extends down further then it will form the first lower-top and lower bottom pattern that could probably signal the end of the current rally as of 19 August at a high of 18026.
We are already trading down at 17450 at the Sgx at the time of writing. Next support lies in the 16900-17000 zone. There are former swing levels, Gann angles, 55 ema etc. etc. to provide some supports there.
If that decline occurs, then it would trip up the expectation of new all-time high monthly close for August. So that is one anecdotal pattern that may go missing.

But this is not be construed to be a bearish advisory as the breadth situation remains quite steady and positive. The US matter may blow over, especially if it doesn't trigger FPI selling in the coming week. That is the main element to watch in the coming week.
About existing long positions- if you are a very short term trader (one to few days) then there may be need to book some loss, depending on your trading capital and risk bearing capacity. LIFO should be followed as an approach if you plan on exiting.

Shares of RBL Bank climbed nearly 5 percent maintaining its upward trend. The bank has been giving high returns on the market to investors recently. In the past 5 days, shares of RBL Bank have gained over 24 percent while in a month the shares have gained over 34 percent.
The bank also announced on August 22, that its board has cleared raising up to Rs 3,000 crore to fund the lender's business growth. The fundraising will be subject to the approval of the shareholders, the bank said.
The shares have been in the news in recent days. College Retirement Equity Fund has bought 45.84 lakh shares or 0.7 percent in RBL Bank via open market transactions at an average of Rs 108.86 per share.

Nifty saw a larger amount of rollover compared to last month whereas BNF was around same levels. Breadth was still quite positive as most of the stocks are still trading comfortably above short and medium term moving averages. I think the pvt banks were used to squeeze the bulls in Bank Nifty as all of them dropped and in direct contrast, the Psu banks were in great shape. Possibly, with the expiry move achieved, pvt banks may be back in action today? The trend is Psu banks is still very strong and for a change, the tail shall wag the dog here!
In the next series we find Call OI build at 17700 and then 18500. On the put side we find only 17009Pe. No particular build up seen in monthly series.
Weekly Pcr is 0.76 showing lots of call writing. Monthly shows more of Put writing so there is still some bullish bias. Monthly Pcr in both indices shows call shorts dominating. BNF 0.66/ Here too some call writing. Main call writing at 39500 with 39k short straddle written.
IT sector was in poor shape yesterday and all stocks were in sync with the index and may continue lower today as well. So if market slides or some hedging is required then IT names are the ones to look at.
The rally in Healthcare stocks also seems to be failing. So that is another area to look at for some short opportunities.

To bring about uniformity in fertiliser brands across the country, the government today issued an order directing all companies to sell their products under a single brand name of ‘Bharat’. Following the order, all fertiliser bags, whether containing urea or di-ammonium phosphate (DAP) or muriate of ootash (MOP) or NPK will sport the brand name as ‘Bharat Urea’, ‘Bharat DAP’, ‘Bharat MOP’ and ‘Bharat NPK’ irrespective of the company that manufacturers it, whether in the public or the private sector.
The move could harm the fertiliser companies as brands apart from being product differentiator also helps in building an image of the firm while going into the farmers’ fields.
Coromandel Fert was down sharp since the start of the day. But other than that none of the other stocks were seen impacted much. Perhaps this news was known to the market already.

The instability has shocked global markets, sending gas prices from Asia to the US soaring amid a race for supplies. The rupee traded on a weak note versus the US dollar as global crude oil prices rose sharply following the European Union’s decision to slash oil imports from Russia by the end of 2022.
High crude oil prices push up India’s trade deficit and pose significant upside risks to inflation as the country imports more than 80 per cent of its fuel requirements.
Benchmark futures retreated after settling at a record high on Monday. Prices are still about six times higher than they were at this time last year, with the panic spreading across nations ahead of peak winter demand.
The Indian rupee ended flat, at 79.86, against the US dollar on Tuesday as the central bank's intervention and foreign investor flows kept the dollar demand well filled.
At the interbank foreign exchange market, the rupee ended at 79.86, as against its 79.87 close on the previous trading session against the US dollar.
Based on the previous trading sessions, there is a consistent bearish momentum and currently the price is heading towards consolidation.

Bharti Airtel promoter Bharti Telecom will buy a 3.33 percent stake from Singtel for about Rs 12,895 crore in 90 days, the telecom operator said on Thursday.

Bharti Airtel shares rallied 4 percent in early deals following the development and investors on Dalal Street welcomed Bharti Telecom's move to acquire stake in the telco. Today 25th August at 9:47 am, the stock was trading 0.9 percent higher at Rs 745.80 on BSE.

The ongoing uptrend gains momentum owing to these changes.

Time Technoplast, a plastic packaging company, seems ready to march as it stages a breakout past prior levels. Could be a decent short term investment for a target around 145-165.

In the past three months, sugar stocks have underperformed the market by falling in the range of 20 per cent to 35 per cent after the government imposed restrictions on sugar exports from June 1. However, a silver lining is seen as Sugar production is expected to hit around 40 million tonnes in the current financial year. The sugar season runs from October to September and the government is reviewing to relax the export restrictions.

At the moment rallying energy markets, tight sugar availability, COVID lockdowns in China and logistical issues from the fallout of Russia’s military invasion of Ukraine could trigger a rise in global spot sugar prices.

Balrampur Chini Mills, Triveni Engineering & Industries, Avadh Sugar & Energy, Dalmia Bharat Sugar and Industries, Dwarikesh Sugar Industries, Uttam Sugar Mills, Shree Renuka Sugars and Vishwaraj Sugar Industries are some popular sugar names that are attracting attention at lower levels. Out of these Balrampur Chini Mills and Triveni Engineering have shown a promising recovery and can be tracked from a multiday perspective for the coming weeks.

Market opens better as expected. Remaining steady as braedth is quite positive. Although people have used the better start to book some profits on pending items (positive braedth is 72% on close to close while dropping to 56% on post open basis), the damage is limited. So there seems appetite yet for stocks.
Psu banks in good form and the second rung bank stocks are on a run. RBL still a gainer despite moving into futures ban. Roll wont be possible in ban and hence delivery based buying may be happening for Btst type trade here. If there are intra day dips then those with funds can attempt a quick delivery based trade here.
LT, Ntpc mentioned earlier are mildly up. Can continue long.
Adani group stocks seem to be recovering from a bout of profit taking. Ad Green is something to take a look at for investing. Another stock I am looking at for investing is Lakshmi Machine. Set ups in both charts are attractive.

Sgx in good form so a better start seems to be indicated. Monthly expiry today and we see Bank Nifty still in good shape and set to lead the trend. Calls unwound and Puts added. While the Pcr for Nifty continued around 0.85, that of the Bank Nifty ran up to 1.01, clearly showing the continued interest of traders in the BNk Nifty. The Max Pain for Nifty remained at 17600 while that of BNifty climbed further to 38900. So, trailing stops on longs in indices can be kept a bit below these Max pain levels. Put writing in BankNifty has advanced all the way to the present levels implying an aggressive stance for the expiry today. In direct contrast to this evidence is the piling on of calls at 17700 thru 17900 strikes, implying that not much of upside may occur in the Nifty.

In yesterday note I had mentioned that the second string banks would be in play and we got some nice profitable moves in RBL, Federal, Idfc First etc. The latter two continue to look quite spiffy, having just made upside breakouts on the charts so one cn continue to prospect here for opportunities. Among pvt banks Icici Bk seems to be ready to continue higher and to be accompanied by IndusInd bank. Bandhan Bk has also shown some strong moves and can continue.
Another two stocks to keep an eye on for bullish trades could be L&T and Ntpc.

Gautam Adani-led Adani Power Ltd has agreed to buy the thermal power assets of DB Power Limited (DBPL) for nearly Rs Rs 7,017 crore enterprise valuation, the company announced on Friday. With this acquisition, the Adani Group-backed power flagship will expand its offerings and operations in the thermal power sector in the state.
Both sides signed an agreement for the all cash deal on Friday afternoon. Due to this, the Adani Power stock moved up by 5 per cent on Monday and DB Corp, by 14 per cent after the former announced the acquisition. In the past 12 months Adani Power has moved up nearly 5-fold from a low at 70 in Aug21 to around 360 currently. The chart now shows some momentum divergence at the highs and volumes have been dropping off as the prices moved higher. Chances are that the stock could now slip into some consolidation mode for a while ahead. Shorter term players who had bought lower can consider profit booking at current levels.

Opening has been sedate and the trading pattern post open too remains similar. The breadth in FnO is about evenly divided and there seems to be no hurry to create fresh positions. Second rung banks were expected to provide some action and they are seen doing so with Idfc first, Rbl, Bandhan, Fed etc in play since the morning. Sector plays are mixed with only Realty showing some spunk and perhaps some action from PSE counters. Seems like a sedate day ahead of us. Early in the day action in options seems to be strangles of 17500-600 being laid on. There is an increase in intra day IV and so maybe some long strangles are being created instead of the usual shorts? Right now IV in BNifty is also at the lower band and hence we may not see too many new shorts and hence light trading may ensue.

SGX is not in a mood to oblige the bulls as they tried to stem the slide and it shows a decline implying a down open. It will be important to see how the market moves post the open today because the positions have been created for further gains (at end of day) with call shorts covered and put additions. This is so in both the indices and we see the PCR in both moving up from 0.65 levels now to 0.85 levels. The big OI concentration are at 17500Pe/18000Ce, so that is a wide range with just 2 days to go for expiry. For Bank Nifty it is 38500Pe/40000Ce. So it doesn't seem like positions are likely to get squeezed. This can perhaps lead to a tame expiry if matters continue like this.
The ratio chart between BN and Nifty is still poised in favor of Bank Nifty advancing further. So do watch the performance of leading stocks. Hdfc Bk is usually used to for these machinations along with icici. The strength between pvt and psu banks is divided as of now so the pvt banks will have to do strongly for the BNifty to continue. The FinNifty seems well positioned so we should be alert for moves in financials too today. In addition one can track second tier banks like CUB and Federal where charts are showing some positivity.
Among other stocks one can keep track of BEL, Rain Ind and Coal India for bullish trades. Hind Lever seems to be faltering a wee bit and should be looked at if mkt doesn't recover from a soft open.

IT companies have been facing lot of headwinds and it looks like the list of woes could continue for the next few months. After a big jump in the margins and profits in the quarters immediately after the break-out of the Covid-19 pandemic in March 2020, the export-driven IT services companies are now facing their biggest earnings challenge in more than a decade.
The operating or EBITDA (earnings before interest, tax, depreciation, and amortization) margin of the IT industry declined to more than a decade low of 23.2 percent in the first quarter of the 2022-23 financial year (Q1FY23) as operating expenses raced ahead of revenue growth or the firms.
IT is a global industry and its growth and margins are greatly influenced by global economic changes. The US is facing wage inflation that has pushed up the salary and wage bill for tech companies all over the world. The recent newsflow of Indian IT majors is indicating that there could be reduced variable payouts for the April-June quarter in a bid to defend margins.
The operating expenses for the industry are now growing much faster than underlying growth in revenue, leading to margins contraction. The biggest culprit is salary and wage growth that has shot up for all companies due to a sharp rise in attrition rate in recent quarters.

EVs are gaining attention across the globe as they help reduce emissions and depletion of natural resources. Factors such as growing demand for low emission commuting and governments supporting long range, zero emission vehicles through subsidies & tax rebates have compelled the manufacturers to provide electric vehicles around the world.
This has led to a growing demand for electric vehicles in the market. Countries around the world have set up targets for emission reductions according to their own capacity.
The Indian EV market is also evolving fast as close to 0.32 million vehicles were sold in 2021, up 168% YoY. The India electric vehicle market size was valued at USD 220.1 million in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 94.4% from 2021 to 2030.
The attractive incentives being offered by the Indian government on the production and purchase of electric vehicles to encourage the adoption of electric vehicles are anticipated to drive the growth of the market over the forecast period. Ongoing electric vehicle adoption in India is based on the Paris agreement to reduce carbon emissions, to improve the air quality in urban areas and reduce oil imports.
The top EV stocks in the electronic vehicles space and it’s subsets include Tata Motors, Olectra Greentech, JBM Auto, Ashok Leyland, SML Isuzu, Eicher Motors, Bajaj Auto, Hero MotoCorp, Greaves Cotton, Amara Raja Batteries, Exide Industries and Kabra Extrusion Technik.

Larsen & Toubro (L&T) will seize new opportunities in clean and green energy. Over the next three to four years, L&T plans to invest $2.5 billion (nearly 20,000 crore) in green energy.

According to industry estimates, large manufacturing companies could get 20-25 percent of their captive power needs from non-fossil energy sources by 2030.

According to its annual report, JSW Steel has set aside an investment of 10,000 crore to increase the use of renewable energy. HZL plans to invest nearly 8,000 crore over the next five years in environmentally friendly mining operations. By 2050, UltraTech plans to source 100% of its electricity from renewable sources.

At a broader level, the need for green hydrogen is driven by the Energy Conservation (Amendment) Bill, 2022, which was introduced and passed in Parliament earlier this month and mandates the use of non-fossil fuel sources in industry.

On the chart of the Power index, we can note that there is a very steady and unhurried advance in progress. The rise is well supported by a support trendline. One may use dips in power stocks as buying opportunities.

According to an OPEC report, India's demand for petroleum products such as gasoline and diesel will increase by 7.73% in 2022, the fastest rate in the world.

The growth in demand the fastest in the world ahead of 1.23 per cent of China, 3.39 per cent of the US and 4.62 per cent of Europe.

After the United States and China, India is the world's third largest importer and consumer of oil. Demand for petroleum products in India is supported by 7.1% economic growth, continued economic reopening amid eased Covid restrictions, and the easing of trade-related bottlenecks, which support both mobility and industrial sector activity.

Open soft as indicated by Sgx. Breadth is widely bearish. More than half the stocks in FnO list have lost more than 2% which means that the market is down trended for the day. Hence we have to use rallies to short. All sectors in the red with Midcap150 index being the max losers. So the second rung stocks are taking a hit. Banks also showing negative breadth with Kotak, AU and Indus surviving, barely. PNB is hit and seems to be selling there. No pockets of strength in Nifty and Adani Ports seems to be continuing the slide set off yesterday. Room there to decline further. Metals are down so they can be shorts. In Pharma Divis and Sun are facing pressure and may wilt further as long positions were built here. Bajaj Twins are witnessing profit taking.
The only place we are seeing some positive action is in Nifty next 50 list where some greenery has appeared post open. Hence there may be an attempt to rally in the first hour.
17630/38680 are levels to watch for resistance during the rally. Only upon crossing those will some strength come into the bulls.

The Dollar index DXY is on a run. This cannot be a happy development for other markets and not for India too. The INR has weakened alongside and is on the verge of breaking to a new low beyond 80. The RBI is at work trying to soften these blow but with the Dollar strengthening on its own, there may not be much that the RBI may be able to do to stem the tide. Typically Nifty has an inverse correlation with the INR move. For eg. The Inr started weakening around April first week and the market had a sharp fall from there that continued till the low in June mid. The Inr continued to weaken a bit further but by then the FPIs started to return and we had a phase when the equity markets rose despite a weak-ish Rupee.
But the chart is hinting at further weakness to come in the INR and the market has already started sliding. On the comparative chart we can note that the Dollar strengthening has been in progress almost all through 2022 so the tailwind is for continued strengthening of the Dollar. Hence the cross relation signal with Nifty would suggest some downdrafts for equities for now.

An interesting blog from the IMF is suggesting that the trends of Crypto currencies and that of Asian equity markets have been increasing manifold. According to this blog, India is placed 7th among countries in terms of crypto ownership (7.3% of the population). Since the pandemic, the correlation with equities has increased over 10-fold according to this blog. Clearly, there has been some risk spill over between the two assets as volatility correlations too has increased about 3-fold. It is interesting to note that in an earlier blog published on the same subject in Jan22, the IMR reported that there was hardly any correlations with major stock indices before the pandemic. At that time, cryptos were thought of as a form of risk diversification to deal with volatility in other asset classes. But this changed after the extraordinary responses of the central banks to pandemic.
Adoption by individual and institutional players in places like Vietnam and Thailand createdan atmosphere cryptos financial stability risks. While cryptos were largely insulated from financial systemic risks before the pandemic, the huge surge in crypto trading by stay at home traders and low interest rates, sent the value of worlds crypto assets up nearly 20-fold to around $3 trillion . With rising interest rates now, cryptos have plunged to less than $1 trillion, thus bringing huge volatility into the asset class. With insulation of earlier years lost and with wide ownership and participation, the crypto assets are now getting increasingly correlated to equity and other assets.

As expected, the indices have been sliding slowly thru the day so far and the Nifty hit the support zone at 17530. Absence of any bounce from there would imply that buyers are not yet willing to chance their arm. So rallies, if any, shall be on the back of short covering. Breadth situation continues to be negative and therefore there is no effort to bottom fish in stocks either. The Dow futures continue to show negative and that is another pressure on the trends.
If the support at 17530 breaks then one can continue to be on the sell side of things and use index puts to play the trades.

A weak open was being signalled and that is what we have got. Now to see if it continues lower or not. There doesn't seem any reason not to continue because a lot of people are ready for a correction and would be looking for lower levels to enter. So buying may come only a bit lower. Once the NF breaks 17600, the next halt is around the 17550-530 area. I figure the pace may slow down during the day and it may be more suited to option traders than directional players in futures. All sectors barring Fmcg are in the red and breadth is negative. No signs of breadth improvement post open so it seems like Btst shorts were not there. So new positions will have to build for some trend to emerge and that may take time. Any news flow may nudge it in a direction.

We are at a ticklish situation in the market right now. Price rise has hit some resistance levels on the charts and there could be some pullback here. The Q1 Eps for the Nifty came out lower than expected around 186. Making a simple annualisation of this figure we would have 744 as the Eps for the year. This is far short of the consensus earnings projection around 825-850 for the year. This would mean the next 3 quarters have to produce a much better show to reach the projected Eps ahead! This may happen too but can we bet on it? I doubt that. Typically, analysts go through the year reducing the earnings target! This has been happening for decades- not just in India but even overseas! Thats just the way we work.
At current Nifty values we are trading at 24x of the 744 Eps. Assuming that we end up with around 800 Eps and remain in the 20-24x Pe, the index range should be around 16000-19000 range.
The one thing that can go wrong with this scenario is if there is monetary tightening in India and overseas. If 10y yield were to shoot up to, say, above 8%, then the Pe will drop sharply and swiftly to 15-16x and that may create larger market pullbacks.
Hence the important things to watch ahead would be interest rates and earnings growth.
My expectation here is that interest rates in India may remain under control (mkt expects a max of 50bps more) and for earnings to improve some. So, the range I have given of 20-24X should probably hold.
In an earlier note I had already indicated that a ranging market may lead to shift of focus to Mid and quality small caps. And that would enable us to remain reasonably active and profitable in the market.

Start was feeble but finish was strong. Expiry related option short squeeze was the reason. Held out some carrot in the morning, probably inducing more selling but then the shorts got the carpet yanked from below their feet. The major bank stocks were used to drive the Bank index higher. But Sgx disappoints, having been initially above 18k but then giving up those levels. So we are left with today's action to take the market above the 18k level.
With shorts squeezed out, can there be more gains? If new demand comes in here, then yes.
The rising no of days keeps extending and therefore perception of risk just keeps increasing. But so long as the trend doesnt relent, we have no choice but to continue trading long. For today if BNF opens flat to down then we should first expect a pullback to support around 39640/39500 levels. First downmoves into this range can be used to buy. The support trendline on intra day chart lies there. So think of bearish only if this is lost. What about upside? Well any continuation higher would be normal moves and hence one can continue pending longs or create fresh long with 39600 as stop.
For Nifty, the important support zone is around 17860 and then 17725. But in the Nifty the main focus is on whether 18k will be crossed or not. Hence if market moves up after a flat start, then can go long in Calls for a run to 18100-200 area. It may not really be worthwile for long PE trades because the hold of bulls is quite strong as of now.

Kubota, Apollo Tyres, Bosch, Eicher Motors, MRF, and Maruti Suzuki India all saw a 2-10% increase. Both Mahindra & Mahindra (M&M) and TVS Motor Company set new highs after increasing by about 2% and 3%, respectively. During the fiscal year 2022-23, the BSE Auto index outperformed the market by 26%. (FY23). In comparison, the benchmark index has increased by about 2% over the same time period. PV volumes increased by double digits in July 2022, owing to a large order book and increased production.

The auto sector's strong outperformance is primarily due to a pick-up in the pace of monsoons, fuel excise duty cuts (8 a litre on petrol and Rs. 6 a litre on diesel) in May 2022 (lowering vehicle running costs and providing impetus for new vehicle sales), a decline in global crude prices, and expectations of further softness in fuel prices.

In addition to alternative channels and customer experience delivery, Kotak Mahindra Bank plans to limit its offline expansion to 50 branches in FY23. Only 2% of individual customer transactions take place in a branch environment, according to our internal data, while 98% take place in a non-branch environment.
As a result, limiting expansion is a deliberate strategy. While digital expansion is preferred, the bank believes that physical expansion cannot be ruled out for the time being.
The stock has been lagging a bit among the private bank pack but seems to be getting ready for some advances with an attempt to breakout from a range formation lately. A trading buy could be getting set up here.

IHCL is taking a strategic approach to expansion. IHCL is currently constructing a Vivanta in Ahmedabad and a Taj in Lucknow. Aside from these initiatives, the North East is a top priority. One of the current projects is to build infrastructure and destinations in new destinations such as Lakshadweep and Havelock. So, if the new businesses, which are currently small, generate 20% to 30% of our revenues in the next three to five years at a margin of 4%, they will help boost the company's overall margin, which is the strategy.
In the last five years, IHCL has signed 110 contracts, 40 of which have opened. The goal is to open at least one hotel per month and to open 16-18 hotels per year over the next two years. Over the next two fiscal years, over 32 hotels will be built. At the same time, IHCL will continue to sign new hotels, so our pipeline will remain at 60 hotels, representing nearly 30% of the total portfolio. This does not include Ama, which has 90 members, 51 of whom are operational.
All these are translating into better times for the stock as it punches out to new all-time highs and sustains the trend. It is a slow moving stock typically but good results recently along with steady news flow ought to ensure that it remains in a continued uptrend ahead too. Patient investors and traders can take longs during every dip.

Bloomberg has put out some interesting data on the impact of a buying streak from the FPIs. We have seen a successive 10-day buying streak from the FPIs. According to Bloomberg, there have been 43 such instances in the past over the last 5 years. In 95% of those cases the market has been higher across a 10/20/60 day window. Now that is an interesting statistic. Most people are looking for a reaction in the market for the past couple of weeks because the near-vertical rise of over 2500 points and are therefore not really participating in the advance. Such a statistic ought to be an assurance for them to be a buyer during market dips in the immediate future.

Sgx points to a flattish start. Option data indicates that the Call shorts threw in the towel yesterday. Large unwiding at the 17800 strike (and several strikes below it) shows the short squeeze on a wide front. Couple this with unwillingness to wriite higher calls shows a diffidence in their mindset. Now the next bastion is at 18000 strike. On the other hand puts have been slammed into current levels. For these guys the market has to go up without which they will get squeezed. If that has to happen then market will have to fall swiftly. So if market is active on the downside or some index heavies are pushed lower today, expect some speedy moves.
Bank Nifty too saw active call short covering. Bears (and others) now have turned turtle and pressed Put sales to save their losses and here we see strikes from 39000Pe all the way up to current levels. So here too, there is a great need for these fellows, that the market needs to move higher. If it doesnt oblige, the put shorts would get squeezed. So do the same thing for bank stocks- watch the leaders for weakness.
If no weakness appears in leading stocks of nifty and bank nifty then bulls will continue their activity. Trendline support on intra day charts is 39400/17900.

The Nifty has clearly set off further, squeezing the call shorts at 17800 as discussed. Now positions at 18000Ce may be readying for some attack. The bulls have the lasso and they are reining it in. Bank Nifty is a bit of a laggard in comparison to the Nifty yet. This fact was also mentioned in the morning note.
All sector indices are up and hence breadth is decent.
Some news bits driving select stocks include price rise in Aluminium because of power crisis in China, EU is forcing aluminium capacities to shut. Some Al primary production is expected to be shut down in the EU and a few have shut already in China. Hindalco, Nalco expected to move higher.
Market chatter of some bonus issue likelihood in Baj Finance is driving trends there.
Adani group stocks continue to pile on the gains. Ad Ent crosses 3K. Ad Ports is now developing new momentum.
Seems like sector rotation will continue ahead.

The two indices showed differing moves yesterday. Bank Nifty, despite the steadiness in Hdfc Bk, shows a pattern hinting at a possibility of a decline while the Nifty is still showing only a pause in the rise. Both indices have a support trendline on intra day chart placed near by. It is at 17785/39225 on the 15min chart. I would remain wary of any decline in Bank Nifty as it will confirm the declining set of five waves off the high and that could lead to more declines. Nifty doesnt show any such pattern and hence a break of the trendline could give a pullback of lesser dimension.
There is a large CE position at 17800 and that needs to be watched. If it starts dissipating with a price rise then short squeeze can carry market higher. No significant new additional call writing waas visible in the Nifty. So it seems like players are waiting to see how prices move at this extended juncture. Market has been rising now for about 6 successive sessions. Algos will all be poised long but surely, the stoplosses would be now quite tight. Hence any break can lead to a wave of stop trigger actions and that may cascade a bit.
Bank Nifty option dont reveal any specific bias and option writing is visible on both sides.
Given this background, today may not be a day to venture boldly into new index positions in the morning. Instead, I may even chose to let the day go by to see what trends emerge. Individual stock plays may offer better odds compared to the indices right now.

Market hasnt lived up to bullish expectations after the gap up open. But neither has it dropped any. In fact even the gap of the morning remains uncovered as yet. Now there seems to be a slight revival in the bullish activity. Maybe those that shorted the weakness off a strong open are being forced to cover? Be that as it may, the main message of the market for the day is that higher levels are still not attracting any selling, and the only variety we are seeing is one of profit taking.That is not going to push the market down. So being long and continueing to play long remains the way to go.
Stocks are also faring well and sector rotation is visible. That is typical during a bullish phase. So that is another sign of strength.
Block deals are going thru and prices are then looking up further (eg Hdfc Amc). FIIs it seems are now buying whatever they can get in blocks. So the buying program may continue and keep the pressure on the upside.

The other possibility is for market to start better and continue higher. Then the option positions built at higher strikes till 18000 would come into play as they will get squeezed. They may already be sweating. In this case an effort shall be made to carry the NF past 18K within this week.

For Bank Nifty there is only one more resistance to cross, around 39300 area, for it to get into the clear. Given the Sgx level. it should probably start near the resistance. So we do the same thign like advised for Nifty above. But looking at the option chain it seems evident that the positions are bullishly biased as put shorting is heavy while Call additions are less so. Large CE position is 39500 and that may get attacked if rise continues. For pending and new longs I suggest a nearby stop of 38950 and then review as the day unfolds.

SGX is pointing to a decent start. No reason why it should not continue higher. If it opens and trades above 17800 levels then we will be trading into all time new levels on a CLOSING basis. Usually, that is a precursor to fresh highs being recorded too. I had not expected the market to make a new high in calender 2022 but market move is what it is and whatever views we hold should be shelved in the light of market moves. Bank Nifty too has made some good grounds and seems to be playing catch up with the Nifty and that may be driving trends along with bettering trends in the bank stocks.

For the day it is a bit tricky. The Nifty is on the verge of creating some bigger signals. So some judgement is required before creating fresh positions. If market opens with a gap as is being indicated, I will wait for some 15 minutes to see if any signs of selling emerges (red candles on 5 min charts). If that comes in, I would expect that it may come down to test the supports created by last week trading data. This would be around 17700 levels. Very short term players can aim to trade for it, else, others can wait to check what it does around the important support near 17700.

Vedanta is targeting $100 billion in revenue by 2030 as it is continuing to diversify its operations across the natural resources spectrum. Currently, it has operations across sectors such as oil and gas, zinc, lead, silver, nickel, and copper in India, South Africa, and Namibia

As per the financials, FY22 revenue went up by 51 % compared to the previous year. EBITDA also increased by 66% compared to last year. Currently, a total of $ 3 billion has been allotted to the capital expenditure.

Apart from this, In 2021 Vedanta acquired goa-based Nicomet because of which Vedanta is the only producer of nickel in India. The company has also signed a memorandum of understanding with Foxconn to set up an integrated semiconductor manufacturing facility in India.

Such projects will be a strong support to Vedanta in fulfilling its growth potential.
Based on technicals, the price could stage a rebound as stock has slid into the oversold zone with a strong decline of the past couple of months. Once Metal sectors also get into a stride, the recovery process should be faster. As of now, we may still look upon Vedl as a corrective stock only and hence worthy of trading rather than investing in the near term.

Mahindra & Mahindra Ltd plans to increase its cargo segment market share to 65-70% in the coming months, up from 60% currently. The company intends to accomplish this by introducing new products on its most recent platforms.

As part of its expansion strategy, the company has introduced a new area product, Bolero MaXX. More models will be added to the new platform over time.

Because the southern region is a large market for the company, it plans to increase its segment market share to 60% of all India from around 43% currently.

Meanwhile, the company is prepared to meet the demand surge amid the current chip shortage.

Based on technical, the price is currently into a strong uptrend and seems set to continue higher. Currently halted a bit as LIC is reportedly a seller (has sold 2% already) but that supply seems to be getting absorbed. More gains are scheduled for this one.

The most recent gap on BNifty is 38690 and that can be kept as the nearest stop on long positions. Below that we have a virgin CPR that is near the 38250 area. So without these being lost, bullishness in BNifty ought to continue. A similar situation exists in the Nifty as well. The gap zone and the virgin Cpr in the Nifty is around 17550. The Ichimoku shows that the prices are running up with the TS line as support. This happens when the trend is quite strong. 17400/38130 is where the TS line starts the day. So that is additional supports. What this means is that this is still a buy-on-dips market.
FII are on the front foot with continued buying in cash equity, both ways in Index futures and buyers in Index options. On the monthly series they appear to be building positions in BNifty rather than the Nifty as of now.
PCR on both indices continue at 1.10/1.16 so put writers continue comfortably. They made good money last week in writing. For the next week series, option writers are seen busy on both calls and puts. We have a long weekend and the money market is also closed on Tuesday too. If today the market is a bit tentative, I would expect more writing to occur. 17500/17700 are the strikes with the highest OI and that is a tight range. For BN it is 38000/40000. FII seem to have written 39500 Ce (prem 119) and 39000 Ce (prem 302). No specific writing is seen in Nifty options by them. So, if the Bank Nifty perchance goes higher today (past 38900) then it may be worth buying some long calls.

After debuting well last year, stock rose strongly, hitting a high at 2563 in Jan 22. From there, a strong reaction occurred, wiping 53% from the top price in a decline that carried prices back to a low at 1205 by end July 22. The Q1 results were very attractive and the management commentary upon it too was very positive. The two combined has seen some value hunters come back into the stock and prices have been improving since then.
On the charts we find that the stock had dipped to the level of the high of the listing day and the fall also retraced to 76.8% of the entire post listing rise. Momentum divergence at the lows followed by a shift to bullish control in the recent rally augur well for gains in the stock. Chances are that we have made a long term low in the stock at 1200 and hence the downside risk seems quite limited.
Company has won large orders recently and this comes on top of already sizable pending orders. Guidance for a 50-60% growth in revenues is encouraging and some clarity exists for continued good performance for the coming 2-3 quarters. Makes it ideal for institutional bunch to buy into it. Already about 23% DII and 2.5% FII holding exists. Scope for FPI to buy is what I feel because DII holding is already large.
First target should be 1750 and second target can be 2000.

In July, FPIs were net buyers after nine consecutive months of selling. Based on data, foreign portfolio investors invested most on FMCG sector.

The level of FPI allocation to the FMCG sector has reached its highest level since June 2020. Last month, the sector was one of the best performing, gaining 13%. According to the FPI, net inflows could have been directed towards ITC stock. With gains of around 40% this year, the stock is one of the best performing in Nifty.

FPIs' exposure to IT stocks was further reduced due to valuation concerns. FPI exited this sector due to rupee depreciation, good valuation, and unimproved margins. Pharmaceutical stocks have also fallen to their lowest level since January 2022. Following nine months of aggressive selling, the banking and cement sectors saw inflows. The allocation to the cement sector has now reached its highest level since 2018.

Metal stocks experienced outflows for the third month in a row. After seven months of nonstop selling, the real estate sector saw inflows for the first time. With gains of 18% and 17%, respectively, the metal and real estate sectors were the best performers in July.

Additionally, FPI allocation to banking and financial has reached its highest level since November 2021, as credit growth over the last month or so has exceeded pre-pandemic levels. Furthermore, the June quarter results show that net non-performing assets have decreased.

Among many factors, decreasing commodity prices, improving bond yields, and hopes that the US Federal Reserve will slow its pace of monetary tightening have led to FPls becoming buyers again.

The technical data is showing strong ADX and positive DI levels followed by a strong bullish momentum in the price.

US inflation came in softer than expected and there is an immediate response from the markets. Dow and Nasdaq were up and have stoked gains at the SGX. At the time of writing SGX shows 200 up and maybe by the open, this may moderate. But the key thing is it will have call sellers in a bit of a tizzy. Today is weekly expiry and big call shorts exist at the 17700-800 levels. PCR is about 1.08 so put shorts will also be there. One should watch the progress of the Pcr during the day to know whether the call shorts will be squeezed. If the uptrend lasts beyond the first two hours or so, I expect they will be. Max pain is at 17500 and may shift higher during the day. So watch that too.
Bank Nifty will get dragged above if the Nifty remains strong. Pvt banks are seen doing well and SBI decline also seems contained. Hdfc and Icici Bk are seen well placed for more gains. Their GDRs were trading positive this morning. The big CE short in this index moved to 39000 so they may not be shaken much at the open. But there may be covering of the large 38500 Ce short and that can provide some fuel upward.

In the attached chart we can note that the Dollar Index (DXY) is about to crack a support trendline of many months. A hint of that was already given when it dropped beneath the short term support trendline on 28 July. If this crack develops into a decline, then the DXY may seek out the 103-101 zone.
On the momentum charts the recent rally of the USDINR to around 7959 levels showed a possible range shift signal and in today's trading the intra day charts, we are finding a shift towards short term bearishness already for the Dollar.
Cooling of US inflation is the main reason behind the move. We will know more as the day unfolds in the US.
If this happens then we could see the FPI buying continue. They have already been pumping in a decent amount in August so far. If more is going to come in, it would act as a good impetus for the bulls to continue their charge.

Based on financials, within mobility solutions, sales growth was led by the primary powertrain segment. Gains in the powertrain segment came from a 55% increase in sales to passenger vehicle makers while commercial vehicle customer sales grew in the 66-71% range. The only segment within mobility which saw a decline was two wheelers where sales fell 12.9 % due to the shortage of semi-conductors. Meanwhile, the current margins is 700 or 800 basis points lower than pre FY20 levels due to unfavorable product mix (lower diesel products), higher proportion of traded goods, increased logistics costs due to China lockdown and investments in auto technology.

Currently, to improve margin levels, increasing localization of BS6 diesel fuel injection systems would help but it’s a time taking process. A faster way would be the decline in current raw material prices. Thus, margin is expected to revive till 15% in the near future in case this strategy persists.

Based on technical, the price is having a bullish momentum as its participating in a continuous uptrend. The strong ADX and positive DI levels are backing further growth of the current bullish momentum.

Banks have continued higher although at a slow pace. This is mainly because the stocks have been mixed. Large upside contributions to the Nifty by Icici Bk and Reliance today are almost nullified by declines in Infy and Baj Finance. So the rest are huffing and puffing to keep the index aloft. Unless stocks crank it up in the balance one hour, we may end the day similar to how we started it. Like I mentioned in the earlier update, the bullish bias is not eroded yet. In fact in the BNifty we find that put additions are now happening at the 38300 levels, implying further gains to be made there. In individual bank leaders too we are seeing a similar addition to near the money put strikes. So the bullish bias continues in banking area. In the Nifty large addition to 17500Pe suggests that bulls are preparing to make a big stand here and try to push prices higher.

Post open the indices are drifting and it seems like Monday Btst positions are being unwound. Option traders too had become aggressive towards end of Monday, shorting ATM Puts. Nifty is trading below 17500 and big short CE exists at 17400. So that is really the test of strength area. Similarly BNifty shorts were at 38000Pe and that is still holding strong. So, even though there hasnt been any specific action since the open, the fact that the bulls are able to hold the levels is itself a signal of strength that may enable market to close higher.
Above 17550 one may want to consider buying CE. Similarly above 38400, one may want to get into long CE in BNifty. While the resistance build has been at 38500, the fact that the market reached those levels and has not met with any significant sell off would imply that only pending longs were taken off. So no real selling emerging yet. Hence looking for continuation of the market higher.

Tata Chem mentioned in the morning has been very strong post open, starting with a gap and building on it. More gains ahead. Can make it a multi day trade I feel.
Gnfc was the other one. STarted weak with a down gap. Looks like many were waiting for the results to take money off. But some mild recovery from the morning low. Can keep an eye for trend revival but perhaps today may not be that day.
IndHotel also same fate- profit taking after the results. But great trends are in progress and hence dips into support will continue to be bought.
Icici Bk holding up so far. Can follow if it punches higher later. But bank to buy would be Indus Ind Bk that is seeing continued upward tracktion.
Entire IT pack on the losing side. So no buying to be entertained here. Not really a day to short so not exactly looking here to short either.

In recent weeks, equity markets have recovered lost ground as foreign inflows have resumed.

Based on the views of a Mutual Fund Head, while the macroeconomic challenges of inflation, interest rates, and fiscal deficit persist, corporate India continues to see strength in its demand outlook and margin sustainability. The drop in commodity prices is good news for margins.

If the inflation rate continues to rise, interest rate hikes may continue, highlighting the risk-off sentiment globally and potentially leading Fils to continue selling Indian equities.

Credit growth remains strong, and margin pressure exists in some industries, but it should begin to ease gradually. Engineering firms' order books remain strong, providing visibility into incremental capital expenditure and earnings growth. The corporate commentary is also still positive.

Financialization of assets and a shift in household wealth allocation toward equity-oriented MFs should result in sustained inflows, indicating a high potential in this segment.

According to a recent study, India is expected to lead the spending boom caused by Gen Z, or those born between 1997 and 2012. Gen Z accounts for more than 25% of the global population and will account for 30% of the workforce by 2025. Jefferies predicts that as they enter the workforce, their income will increase fivefold between now and 2030. India is the largest Genz country, followed by China, which has its own socioeconomic complexities.

Zomato, Nykaa, Nestlé, Britannia, Devyani International, Jubilant FoodWorks, and Dabur are among the companies Jefferies believes will benefit the most from this spending spree.

Meanwhile, as families become smaller, Generation Z will eventually inherit more wealth than previous generations. Another advantage for Indian GenZ is increased digital/internet penetration. Despite growing fivefold in the last six years, digital payments in India remain at around 5-6 percent of the retail market.

Interesting aspect of BNifty chart is the tight range 37750-38250. This range has seen two important events- last week expiry and RBI policy- and continued to hold and now prices are threatening to go higher.
Was Monday rally only due to short covering in the later half of the day? It will be shown by the trading pattern of today morning. We traded into this area last in April. If one looks to the left side of the chart, we can find strong support also near the 38000 levels. Hence if this level holds and the market rises from there then one can go long Calls for some continuation towards 38500. Interesting to see some liquidation of OI at 38500 strike. We can see good addition to Put OI so traders are poised for gains and hence if declines ensue then these put shorts will be pressure.
On the Nifty option chain, we find put additions at 17400-17500 levels, again, near the money. So, here too, any downward move will create pressure on put shorts. There is no meaningful call addition till 17800 levels or higher. So, advances can lead to some advances too.

Hence market is evenly poised and one should, ideally, wait for some indication to emerge from the market before entering into new trades.

Good results from Gnfc and Tata Chem may see them in action today. Both stocks are about to trade above the 62% retracement of the last decline. Both are coming off a big decline into June low so upside price action can see a challenge of the highs made back in May.
Ind Hotel was another top result that may be in action today. It is at a all time high and that makes it at a different playground altogether. Above 272 stock is a buy for continuation towards 288-290 levels.

The brisk rally from the June low continues unabated. As of 8 Aug, the situation across various indices is shown in the picture. It can be noted that three of the four indices shown (Nifty, Next50, Midcap, Smallcap) , three have made rapid strides and are at shouting distance from the all time highs. The Small cap index is still seen about 22% away from the all time high and that is a big chasm to cross.
The damage to the small caps were also quite substantial during the fall (which is how it is every time) and hence only very sustained new buying can bring them back to life. While the recent rise has been creditable, it can be seen that there is still much to do for the small cap index to regain its glory. With 2000+ points already in the bag for the Nifty, can it have legs to continue to ensure small caps also reach higher levels? Seems very difficult.
Hence it may be time to review the small cap portfolio that one may be holding and look for the under performers in this rally and book losses. Weeds are also green in color but they dont really belong in a garden.

All the listed paint stocks appear to be doing rather well. Recently most of them came out with decent results with Asian Paints (3450) being the best among them. Notably it has seen the best advance from the recent reaction lows and seems all set to challenge former alltime highs.
Bottom reversal signals seem to be visible in Indigo Paints (1528) while good numbers boosted the trends in Kansai Nerolac (496) and Berger (674). Shalimar Paints is not a well traded item but has been showing a somewhat different trend compared to the rest. Unlike all the others that saw a sharp decline into May22 lows, Shalimar has been maintaining an uptrend all through 2022. Akzo results were below market estimates and hence its rally appears to be slightly stalled.
Declining crude prices ought to be positive for Paint stocks.
Asian Paints remains a buy on dip stock for both investors and traders. Value hunters can seek out Indigo Paints.

The eCommerce segment is booming in India and is fuelling the growing need for warehousing across the country. The growing acceptance of warehousing as a specialist sector is leading to several industrial houses option to outsource their goods storage requirements. This has led to monetisation of non-core assets like land, industrial areas, etc.

India has seen a sharp improvement in its ranking in its ability in Logistics Performance Index (that tracks the ability of a country) from 54 in 2016 to 42 in 2022. This clearly spells some positive traction that could trigger some moves in related stocks.

With the steady increase in the demand for industrial and logistical parks, we can look at how warehousing is becoming a necessity. As the e-commerce players are building their warehousing capabilities to meet the demand we could look at the price action in some popular names like Container Corporation, BlueDart Express, TCI Express, AllCargo Logistics, and Aegis Logistics.

Out of the above BLUE DART EXPRESS looks to be the best bet and one should track them from an investment point of view.

The Systematic Investment Plan (SIP) shows an increase in inflows from retail investors. The net inflow from SIP's increased five percent to 8600 crores in June from 8155 crores in May 2022. After taking a dip in June this year the SIP has once again seen a revival on the back of falling commodity prices especially crude oil. Also, the gradual strengthening of INR has helped the investors gain confidence.

All the traders are currently able to absorb all the price shocks and are riding the underlying bullish momentum. A good time to engage in momentum investing play.

Larsen & Toubro (L&T) is aiming for a 2.7 trillion turnover by the fiscal year 2025-26, according to its recent AGM. Currently, the company ended FY22 with a topline of 1.56 trillion, a 15% increase over the previous year. If this growth rate stays consistent, the turnover target will be achievable.

To meet the turnover goal, the company intends to diversify its order book, capture cost efficiencies, and leverage more technology in order to accelerate long-term gains.

According to financials, profit after tax increased by 23% year on year to Rs. 8,572 crore. As of March 31, the company's consolidated order book stood at 3.57 trillion.
Based on technical, the past downfall has entered into a strong buying zone wherein a strong price action is encouraging more up trend. Price is having a strong momentum backed by bullish ADX and Positive DI numbers

Well, so much for bearish expectation from the Bank Nifty. it feinted with some weakness post open but once the sellers were in, the index has done an about-face and headed higher to trigger stops etc. In the meanwhile, the Nifty too has been making some progress. Question is, where now? Clearly, poor results are being pushed to the background and good ones are being rewarded. So bullish bias needs to be maintained. Above 17500, bulls will take center stage in the Nifty so that is something to wait for. BN shorts are trapped and will keep feeding it during the day. SBI, which was expected to take the BN down seems to have been countered with gains in Icici, Hdfc Bank, Axis etc. So long as they hold, even SBI may perhaps stop declining?
IT and Pharma are down. Auto is up and in there M&M results were attractive and should continue higher.
Bullish bias for the balance of the day. Intra day dips may be looked upon as a buy opportunity.
Tomorrow is a holiday so one has to be wary of entering at higher levels because there may be some trimming of longs before the end of the day.

Though the Bank Nifty fared better in the last week, it seems set to be a bit pressured possibly in the week ahead. The main OI concentration is at 38000 with 38500 as CE build and 37500 as the nearest PE build. There is a larger position in Calls compared to the Puts at the ATM level indicating a slight bearish bias as calls seem written at this level. The ATM straddle fetches about 700 points so that is the current expectation of a range as we start the week. Given that there are more resistances at higher strikes than current, chances are that declines may force the BN towards the support area near 37500 or even lower. Stop on such trades can be kept at 38200 if taken and if affordable. Else set your own.
SBI results were much below expectations and will surely exert pressure on the Bank Nifty. After all, it was singularly responsible in pushing the BN by about 1000 points during its advance and a lot of it was on positive expectation of the results. So, it is quite possible that disappointments can also lead to some declines in the BN.
By itself, SBI will close the last gap to the upside once below 526 so it is a sell below those levels.
It is seen on Neotrader that the bullish scores for BNF as well as SBIN (particularly the latter) is high and hence bearishness will set in fresh and that may have a life of a few days if it manifests. Thus short trades, if taken, should be of multi day nature and have a target around 512/505 levels.

As JSW Steel hugely depends on exports of value-added steel as it exports 25-30 % of steel production in India. But the export duty on steel had a big impact on its exports.

Impacted by the export duty and falling margins, JSW Steel capex has decreased by 20% for this fiscal. Domestic demand is slowing even as the company is ramping up capacity by 5 million tonnes per annum (mtpa) at Dolvi. As cost pressure was building due to a spurt in energy prices after the Russia-Ukraine war, prices of all key raw materials have gone up. Thus, with domestic demand slowing down, cost pressure building, depreciating rupee and the levy of export duty, the company is facing a challenging situation.

Prices have already fallen more than 20 % in the Indian market. Though the objective of the export duty was to contain inflation it has caused a huge damage to the industry, thus, government has also given indication that it is a temporary measure.

Meanwhile, the company has several ongoing strategies to deal with such an impact. One of them remains adjusting their special or discretionary capex and having projects worth Rs. 5000 cr put on hold.
With strong ADX and DI levels, the price has entered into a bullish momentum and is into the buying zone currently.

A bit all over the place for the day on Thursday. China firing news led to declines but as the indices hit down into supports during that dip, there was a recovery. Not quite out in the clear at the close, so we need to see upside follow through if the market has to make further strides. The support at 17200 seems solid and can be kept as the stoploss on any pending longs. The fall in BNF was steeper than the Nifty and the recovery at the end too was not quite so much so more work cut out for bulls here if they want to take this one up. A hint of some expanding pattern over the last three sessions in the BN so need to be a bit careful with longs here. 37300 should be the stop on pending longs.

Sellers of calls continue to dominate into the new series (at 17500) and hence expect rallies to meet resistance. But once this resistance is taken out, then there isnt much by way of a halt right until 18000 levels! Put sellers dominate at 17300 first and then at 17000 only.
In BNF, call sellers added another chunk today at 38500 strike and that has now become the decisive resistance zone. But Put sellers appear ready to defend 37500 too, despite the event set for today. Maybe they feel any hike is already factored into the price? What if no hike at all? That would certainly be a surprise now.

Interesting to find that a wide number of stocks have shed OI today and that leaves the market quite light as weak hands may have exited. This means if we get some new demand, then going up would be much easier. Can the RBI meet provide that trigger? Let's watch.
On futures, the FIi appear to have added fresh shorts and this seems to have been maily in BNF.Recall that they had already shorted higher calls in Bank Nifty yesterday. 1

Interesting however to note that other world markets didnt fall on this China news. So, maybe it was a ruse to create some shorts for today's expiry?

Both NF and BNF have continued to slide and have gone below the immediate supports that had been indicated for them. Prices are now approaching the Max Pain are of 17100/37600. Seems like the news that China has fired some projectiles into Taiwan straits seems to have unnerved the participants. Substantial additions to 17500CE shows that call writers are active. At the same time it is seen that Put writers are active only at the 17000 strike. Soon after the start of the day, the PCR started sliding swiftly from comfortably above 1 levels to around 0.75 levels showing brisk call selling activity. Selling should ease here as we are down into support.
If nothing further emerges on this China firing news, then we may see some short covering occur towards the expiry hour today.

A fantastic uptrend has been in progress in Varun Beverages since the low back in Mar2020. The stock continues to make all time new highs even as many others have fallen victims to reactions. Stock was in the news yesterday with the announcement of further capex of around 1200cr for ramping up capacities for bottling for Pepsi. It is setting up two large greenfield plants in MP and Rajasthan besides enhancing capacity at its newly constructed Bihar plant. Capacity is expected to be ramped by 30%. VBL hold franchise for Pepsi across 27 states and seven Union territories, besides other international territories. June quarter sales almost doubled and this comes after two challenging years hit by the pandemic.
Chart shows a robust uptrend in progress, well accompanied by rising volumes and strong momentum. Future pullbacks remain buying opportunities in the stock.

Markets have been sliding ever so slightly since a better open. Firstly, there was no follow thru on the better open and the NF could not make it past the 17500 levels at all. Similarly so for the Bank Nifty. For the latter, it was important that the main weights in the index had to shine today. Instead, all of them are down. There was a big Call writing at 38500 strike yesterday and that seems to have been FII trade. So the upsides were a bit capped. But giving up early in the day would imply a test of lower supports. 37750 and 17300 are zones of near support and we can expect those may be reached during the day.
In stocks gainers and losers are quite varied and there doesnt seem to be any concerted sector based moves. If anything, IT stocks are seen a bit better.

Good results from Devyani (185) saw prices perk up yesterday. Looks good enough to continue further.
Adani Trans reported softer numbers. Stock has been on an absolute tear and can meet with profit taking perhaps. We need to see how it impacts trends in Adani Enterprise that is due for numbers today. This is another stock that is also on steroids for a while now. As is Adani Totalgas that too is due for results today. So, an Adani day to watch out for perhaps.
Fmcg stocks have been faring well and we have a few due for results (Dabur, Britannia, BlueStar). Both have slipped a tad so maybe market doesnt expect much.
Paint stocks have been doing great and Berger is due out today. Charts suggest some positive expectation, which if fulfilled, can see more gains. 657 cmp.
Balkrishna Ind is faring well and good numbers here should send stock higher. Dips may not be much unless results are a howler. 2389 cmp.
Many from PSE stables. HPCL, Bhel, Concor, Gail are neutral on the charts going into the results. But REC and GSPL look positive and can be tracked.
Towards the end of the day many IT stocks looked up. Seems like some move setting up here. Go for TCS, Infy, TechM, Mindtree, Persistent etc.

Max Pain is at 17100 and NF recent support and OI concentration is near 17200, hence expect the expiry around this level or above.
3 day high zone is around 17400. Market is trading above that level. Longs are liquidated. So, if rise continues, then it is easy for NF to rise continue towards the next CE cluster around 17700-750.
07:36
If this happens, then the support would work its way up to near 17400 area and expiry will be in that zone. How to trade this bullish possibility? We can sell PE or buy CE.
Next series 17200 Pe is trading at 107 levels and can be shorted. Else, buy current 17400 CE for playing the upside. It trades around 65. Stop on this would be if NF falls below 17350.
One of the events that needs to happen is for BNF to move past 38500 as the highest call writing happened here yesterday. If this happens, then clearly, there is a plan to squeeze the Call shorts.

Tomorrow is RBI meet. If banks and financials are steady or rising today we may see prices ease off towards the last hour as players may want to take money off the table. This may have some dampening impact on the Nifty as well. So, higher levels will be under threat today.

The expectations of higher open were all belied as the prices have declined soon thereafter. the breadth is clearly negative from the start and continues to remain so post open as well. It is therefore evident that there is no big interest in buying the first sell off after the open. Usually, when trends are strong, the first dip often gets bought. All indices in the red as are most sectors. So market in no mood for teji today it appears. The downside will find participants from long liquidation and fresh shorts. So it may be tough to create upward traction except on a per-stock basis. So, for today we look for a combination of shorts and longs.

Sgx looks up and one is wondering why that should be so, considering that geopolitical tensions ticked up a notch on the Pelosi visit to Taiwan. No idea where that is going to lead. The macro data is somewhat mixed. Oil halted its decline, as did the Dollar index. Dow futures were down but Nasdaq was up. Today it may be difficult to call the trends out in advance. BNF is trading near resistance of 38000 and we find straddles having been set up at that strike. The straddle fetched around 500 points. So it seems the option traders too are hedging their directional bet. Best to watch the leading banks to get a gauge on the trends a bit after the open. Active traders can keep 37700 as the nearest tipping point. NF has good resistance in the 17400-600 band while support has worked up to 17200 levels.
FIIs seem to have sold out a good chunk of their long index futures and bought some protective puts.
Yesterday I had posted a note on Zomato based on the price action. Today we are set for a block deal. Perhaps this may remove a big stock overhang on the trends? The lower band is kept at 48 and one can keep that as a stop on any longs created near the lows. If prices continue higher after the block deal is done, then consider that 41 bottom made recently will hold for some time and a rally will ensue.

There are some sudden changes that have happened recently. These are likely to impact the market positively ahead.
1. GST collection continues to be robust.
2. PMI reading came in super at around 56.
3. 50bps hike is already factored for RBI meet on 5th. The commentary may be less hawkish.
4. FII turn buyers once again in the market.
6. Rainfall so far is good. Met announces that coming two months too should see normal rainfall.
7. Auto sales have picked up nicely. Healthy demand for vehicles is always a positive.
8. CMIE jobless data for India shows a drop to its lowest in the last 6 months.
9. Opinion poll shows 0 chances of it happening in India.
10. Q1 results flow has been largely positive, even on a QoQ basis (and definitely so on YoY basis).

Everyone was bailing out of the stock in recent times and there was only talk of how much lower it would reach. But suddenly, the stock comes out with a surprise in the Q1 results. Numbers came in much different from what was being rumoured and this was actually a quarter without the tailwind of the Covid-led ordering. A fwe large broking houses have swiftly come out with a buy reco and together with that we may see some bottom fishing activity come in now. Stock may rally back to 90 levels where some value area exists on the charts. Rsi charts show clear divergence, signaling that a bottom may have formed for now near 41.

After relatively weak numbers yesterday, Escorts saw a flurry of downgrades from big broking houses with CLSA pushing it down to a Sell. The stock has seen a four-week run ahead of the results, alongside the general rally in the market. In the weekly chart attached one can note that the prices came up to the cloud but the momentum in the rise was limited. Now with the results probably providing a negative trigger, the overall technical weakness may lead to some declines in the stock. Clsa has cut its Eps estimates by 25% or so.
Stock could drop to around 1500-1520 levels before it hits some support zones.

Results are good. but prices have run ahead already. Cig, Hotels, Agri have done very well. Paper has been similar. Big jump in profits has come from Agri with good contributions from Paper and Hotels. The Fmcg business continues to be docile. Stock is trading at around 20x at current levels. If market takes more cognizance of the failure of the Fmcg wing to deliver, then prices may come off; however, if it focuses on the non-Fmcg divisions that are now firing, then there may be continued enthusiasm. Other Cig companies are trading around 12x. Nothing out of the ordinary in these results. Price has moved up 20% in the last one month. If you are a trader, think about profit taking. If you are a long term investor, continue to hold. If profit taking comes in, we can see a retreat to 285 levels.

Market set to open a bit soft. Not surprising considering that Nifty has move 14.5% and Bank Nifty by 17.3% from the mid June low. This has been a very trended rise and has helped to restore the sentiment and swing it over to the bullish side. So, people are back to looking at higher targets. Of course, there will always be skeptics. Fast rises often produce skepticism as the chief sentiment. The trick lies in recognising a change in trend in the short term charts to turn contrarian. That has not happened yet. Daily chart RSI on both NF and BNF is very well placed, supporting the view that we still need to be buying the initial dips. Weekly pivot has been left well behind (37200/16950) but those remain the buy-dip level.
Yesterday note mentioned 17400/38260 as target zones for the indices and they are pretty much near those levels. April high is 38780/18173. BNF seems over the hump of the Kumo shadow resistance but Nifty is at that level. Hence I would look to BNF to lead the charge, if it has to continue.
But to be noted that results season for most big names have pretty much run out. RBI meet is set for 5th. Bank of England rate meet on 4th. So end of the week is set for some macro events. So chances are that the rise may peter out here or certainly get into some consolidation to see the events off. This means one has to tread with some caution. Or maybe carry lighter positions. Dont let the cheery sentiment get you careless.
Option selling has advanced to 17200 on NF while call writing present at 17400-500 area. So 17200 is the renewed stop. Bank Nifty put writing is seen down into 37200-400 area so the revised stop is now at that levels.

Meghmani Finechem Ltd (MFL) stated that its topline will exceed ₹ 5,000 crore in the next five years. Following the commissioning of an ECH plant in June, MFL announced on Monday the commissioning of a chloride resin (CPVC Resin) plant in Gujrat with an investment of approximately 190 crore. The plant is expected to contribute approximately 400-500 crore in revenues. MFL has built India's largest plant, with an installed capacity of 30,000 tons per annum (TPA).

In addition to the new investments, the company has spent approximately 250 crore to increase caustic soda capacity from 2,94,000 tons per year to 4,00,000 tons. The current goal is to increase revenue to 5,000 crores by 2027, up from around Rs 1,500 crores in fiscal 2022.

Based on technical analysis, the price is trying to maintain an uptrend momentum. The current buying zone in this trade is confirmed by bullish levels of ADX and Positive DI levels.

The first half of 2022 saw 158,705 residential unit sales in India, a 9-year record, spread among the top eight cities of Mumbai, National Capital Region (NCR), Bengaluru, Pune, Chennai, Hyderabad, Kolkata, and Ahmedabad. This is predicting a high demand in the near future, together with the government promoting more investment in this sector.

Comparatively, the operational margins of the businesses have been under pressure for some time as a result of the sharp increase in fuel prices. The ACC's EBITDA margin decreased 13.1 percentage points from June 2021 to finish at 9.7%. Ambuja Cements' EBITDA margin for the March quarter was 18.4%, down 5.7 percentage points from the March 2021 quarter. Similar to this, Ultratech reported an EBITDA margin of 20.34% for the quarter ending in March 2022, a decrease of 6 percentage points from March 2021.

Additional elements like declining commodity prices and a depreciating rupee that makes imports more expensive require monitoring the medium-term trajectory.

Ambuja Cements currently has a forward P/E of 23.8x (5 year average at 22.3x), compared to ACC's 21.7x (five-year average is 21.6x). Both these stocks are trading inline to slight premium to historical valuations. Margin pressure is projected to continue as a result of the cost inflation scenario driving up input costs.

Despite a decline in absolute numbers, retail investors' share in the market climbed to 1.88% from 1.66%.
Foreign portfolio investors (FPIs) as well as local institutions have decreased their ownership of the company. FPI holdings decreased from 0.22 % to 0.12 %. However, the number of MF schemes holding LIC has increased to 100 as against 19. On the other hand, the number of FPIs holding LIC shares dropped from 59 to 47. Additionally, the number of QIBs, anchor investors in the IPO, almost doubled to 35 (18) but their holding decreased marginally to 0.19% (0.20 %).

As per the financials, the embedded value (EV) of 5,41,492 crore as of March 2022, a slight increase from 5,39,686 crore six months earlier. A rise in the Value of New Business (VNB) margin to 15.1% for FY22 from 9.9% helped the company declare Value of New Business (VNB) for FY22 at 7,619 crore, an increase of 83% over the prior financial year.

A neutral view on the company may be maintained despite LIC's market-leading position and valuations.

In July, foreign portfolio investor (FPI) inflows turned positive for the first time in ten months. Between October 2021 and June 2022, foreign investors withdrew 2.54 trillion (more than $32 billion) from domestic stocks. Rising global central bank rates, rupee depreciation, high valuations, and geopolitical risks all contributed to such massive outflows.

While FPI inflows were only marginally positive in July, their arrival was a significant mood booster. This has resulted in a nearly 9% increase in domestic markets. Cooling commodity prices, falling bond yields, and expectations that the US Federal Reserve will slow its rate of monetary tightening have all contributed to the revival. The 10-year US Treasury yield has fallen from over 3% a month ago to below 2.7 percent, supporting the equity rally.

Hatsun Agro and Heritage Foods reported yearly revenue growth of 31% and 27%, respectively, in the April-June quarter. In FY22, value-added products contributed 27 and 26% of revenue to the two companies, respectively. In the next two to three years, the duo hopes to increase this to 30-40%. As per technical analysis, the weekly time frame charts of Hatsun shows better results as compared to Heritage. Active investors can consider a switch from Heritage into Hatsun to play any upside in the dairy leaders.
Because of the extremely low margins in these segments, any company that only sells core products like milk will be unable to absorb any price increases. Value-added products such as curd, cheese, and so on have margins that are generally higher or, in some cases, even double those of milk. Furthermore, the cyclical sector's margin problems have been exacerbated by the production shortage.
To combat margin erosion, dairy companies have raised milk prices by 5-8% in the last six months. Analysts believe that the sector will need to raise prices in the second half of FY23 to protect profits. Customers will also be charged a 5% goods and services tax (GST) on retail packs of pre-packaged and pre-labeled curd, lassi, and buttermilk.
While the start of the flush season (September-February) may provide some relief to dairy companies in the second half of FY23, traders should expect a quick recovery from this segment.

A better open and some indications that the market is more of a mood to continue higher. The news over the weekend was moderate. No profit taking flurry seen in the morning. So people seem to be sanguine about the strong gains made in July (11.8%). It is either that or no one has positions left any more! In that case, flows shall decide the tone. Most results are done. ITC is a biggie due today. But stock is on a run and good results will keep up the momentum but bad results will not derail it. But overall results flow has been satisfactory so far. Of the 625 results declared (of main stocks), about 420 have shown profit growth. That is a goodly percent. If that arithmetic is based on YoY, then the base effect may have lot to do with it. I am looking for QoQ numbers aggregate to see how good that number is.
Option traders appear to hold that the 17050-17100 area may not break and have build up short PE positions there. ON the upside there could be room for 17400 this week if rise continues. Bank Nifty needs to stay above 37650 to maintain its bullish momentum. it can then see 38265 area. On the lower side break out 36800 should be kept as a warning line that bulls resolve is wilting.
Weekly PCR at 1.25 Nifty/0.96 Bank Nifty suggests that bulllish views continue. The monthly PCR too is similar at 1.5 for NF and 1.11 for BNF.
SBI is the only big bank stock to come out with results. Mkt will be watching this one. Last week we saw some slight shedding of long OI in this. So we need to watch if that continues. It will give us a clue about the results. Other Psu banks results have been quite positive and same expectations are present for SBI. No room for disappointments therefore.

Totally against the expectations that market would move lower, there has been a brisk rally post a flat to weak open. Nifty has quickly regained territory above 16500, which is the minimum requirement. On the options front I am seeing brisk additions to 16500/16400 Pe and that shows a swift shift by option traders towards the bullish side. Situation is similar in BNifty where put additions are seen from 36000 to 36500 all strikes. Call additions in both indices is currently quite minimal.
So, one round of short covering is being enforced. Since it was sudden and unexpected, it is likely to linger into the close. So dullness in the midsession should be followed by some more squeezing towards the end perhaps. We may therefore close the day better.

While everyone is getting into EV area, one of the already listed but not so well known is a company called WardWizard Innovations. it make electronic scooters (brand name Joy) and it seems to have completed a corrective pattern. The chart shows a strong drive in 2019-21 when stock was probably known only to a few. Since then there has been a corrective move with some punching out of a series of new swing highs and lows, creating an expanding triangle type pattern.
This pattern is not unusual in a stock where not much is know and everything is (mostly) being driven by rumours and news trickles and the khabar network. The pattern is seen at the top so has the potential to be a reversal one too.
But looking at the fact that its vehicles are selling and that the Co is about to offer 4 new models and also get into 3-W vehicles, my interest is piqued. It is increasing dealership from 550 currently to around 1500 all India ahead. It has doubled production to 2L vehicles but interesting is that the plant has capacity to produce upto 4-6L vehicles if needed. It had revenue of 185cr in Fy22 with a NP of @9cr. It has zero debt.
Risk taking investors can take a look, if interested in EV scooter makers.

The market has cheered the recent results of Ultratech cem with a strong advance resulting in a clear out performance vis a vis the other cement major. The chart shows the 3 month relative performance of a few and Ultratech (in blue) is clearly the preferred bet.
Company managed to beat market expectations and consensus with its Q1 numbers. That it did so when the industry itself is facing cost inflation has what impressed the market the most. 16% volume growth and 28% yoy revenue growth was a pleasant surprise. Increased govt spends on infra and capex is expected to keep the growth meter ticking. Stock trades at a slight discount to its 5 yr median PE is also an attractive aspect.
Chart of Ultracems is showing a move past a retracement resistance. Next target resistance places the target around 6750 levels. So can be a good large cap bet for some steady gains ahead.

Continued cola imports by India, to ease the supply crunch is making for good tidings for Adani Ent, which secured huge majority of import orders from Ntpc. Of the 2o million tones that Ntpc ordered, about 17 million is being procured by Adani.
Along with Adani Ports may also stand to benefit from the rise in imports in general. Combination of fixed contracts with power producers and a strong transportation network, the Adani twins are positioned to benefit.
Chart of Adani Ent is on a full tear since the low on Jun2 20th. The rise has been steady and gradual and hence chances are that the stock hasn't really got into any kind of overbought situation as yet.
The rise in Adani Ports has been a bit more laboured and it started its advance from July 1 and has been slower although consistent. Both stocks continue to hold out possibilities of continuing higher.

Among the stocks due for results today, there seem to be some expectations that have got built into Asian Pt, Mcdowell, L&T etc. So any disappointments here may prove to be expensive.
All auto stocks took a hit. M&M is losing ground and seems to be profit-taking exits by larger hands.
RBL Bank comes out of the futures ban and may get in play for a limited upside.
Infy sees target cuts by brokers and this may lead to some selling. 1490-95 looks to be a support for now.
Focus may return to FedBk now that all other bank stocks are more or less done. Recall that this had fared the best and stock price had also moved smartly. A flag-type move is seen on the charts and if a rise resumes, then the original targets given near 120 may get realised now.

The government has planned to enhance coal transport and curtail the demand-supply mismatch that is emerging as the shipping route is facing difficulty. The Rail Sea Rail (RSR) route freight rates have been on the rise for the last few years and have gone up by 75% since 2015. This has created cost pressure affecting the viability of this route. The steps taken by the Power Ministry instructed the railways and port authorities to swing into action. The RSR coal route is one of the most important supporting pillars of the latest National Coal Logistics Plan.

Coal India has been responding positively to this news and heading higher. With momentum suggesting more upward possibility, it is definitely something we should consider. Looking at the setup we are observing that a breakout seems imminent over swing highs. With momentum already on the move, a CS line breakout can trigger some upside.

HUL recorded a 6% increase in volume, an improvement over volume growth reported in the previous quarter, but experts predict that price will drive this gain primarily. From the December quarter onward, the favorable effects of palm oil softening and the expected commodities price tapering will be seen.
The company officials said that of the 20% commodity inflation, 12% has been transferred as price hikes to consumers, the company remains unclear regarding reducing prices in the future.
While there are near-term concerns around inflation, the recent softening of commodities, forecast of a normal monsoon, and monetary/ fiscal measures taken by the government has kept experts hopeful of stable earnings.
Price has rallied along with the market since making a low on Jun17 at 2100 (cmp 2650) so the stock has rallied nicely. With market perhaps ready for a pullback, chances are that we may see a pullback to 2400-2500 band. Short term players can book profits and wait to buy back lower.

The Bank Nifty started far better than the Nifty. The former was held up by action in a few banks but the latter was done in, right from the start by weakness in Reliance. But soon thereafter, the bulls in banks too seem to have given up the attempt and we have slide until now with the last couple of hours being a small zone consolidation. This zone is bounded by 36650 and 16625 on the topside. it doesnt seem too likely that in the rest of the day these levels are going to be taken out effectively. Market has therefore decided to concentrate on pushing through the rollovers.
The slow pace of the day has put traders in a quandary- whether to sell for a pullback of recent rise or to buy this dip for some continued rise? My vote is for some declines from these levels also as I dont see triggers enough to carry the market higher. With only Axis Bk and SBI left to fly the flag for BNifty, I think the rally there is done. Hdfc and Kotak were poor numbers, Icici was in line, IndusInd was cosmetic. On the Nifty too, the IT majors are more or less done and nothing much has come of it. Reliance has come a-cropper. Fmcg heavies are done with numbers.
So nothing much left to drive indices.
Add to this uncertainties created by global events down the week. Those will hold bulls back.
Use rallies to exit trading longs. Add a short or two to your trading mix. Play for small moves. Look for some consolidations. This could mean trading strangle shorts in indices and stocks.
Results in mid and small cap stocks will continue to supply the fuel for some momentum plays.

The results of the biggies scheduled over the weekend were not up to par and hence the Nifty is down some. Mainly done in by a 3% decline in Reliance. Considering that, the Nifty down 0.70% is not bad! Nothing in particular from the gainers holding the Nifty up, so it is a spread-out thing I guess. Along with, Kotak, Infy are down too and Icici Bk is barely holding itself aloft.
But breadth is quite poor with all indices down and all sectors too in the red (except for metals).
16500 is the mainstay for the bulls. 36500 for the Bank Nifty. If these are lost then the short term jig is up. So trailing stop for longs should be placed below these levels. Prices are reaching these area as of now.

Large cap IT companies are accounting for 43% of forex revenues received in FY 22-23. The forex revenues that have been generated from export of IT services are up by 22% compared to a decade ago. However, combined forex revenues of the non-IT companies have dropped from to Rs.5.6 trillion in Fy 21-22 compared to Rs.6.04 trillion in FY 14-15.



Translating this into the performance of IT companies based on the recent decline we can consider that it would be a good time to look at IT stocks. The Nifty IT index is reached an important value zone on the charts around 25400 which is 50% of the rise seen since Mar 2020. A rebound from oversold levels is also seen in some key IT names especially from the 2nd Tier. So , it may be a good time to start looking at the IT sector once again from a multiday perspective.

The Pune-headquartered Bharat Forge has 5 vertical business units - Automotive, Industrial, E-mobility, Defense, and Aerospace & Turbomachinery.
According to the annual report, the ATAGS (Advanced Towed Artillery Gun System) firing trials were successful, and a first order for the supply of power electronics to a major Indian CV manufacturer was received. These developments indicate that the defence and e-mobility industries are beginning to make significant progress and the business is developing steadily in the defence industry. Bharat Forge has lately provided vehicles to the Indian Army and has recently earned repeat orders for armoured personnel vehicles. Additionally, numerous other platforms and products are currently in use and facilitating the military, including the artillery platform where the business has successfully finished final army trials. Within the next 12 to 24 months, it's anticipated that things will begin to come into place.
In the meantime, the business has opened a brand-new Greenfield plant in North Carolina, United States. The needs of international brand-name OEMs for aluminum forgings will be met by this US unit and the plant in Germany.
In general, the business has restructured its internal organization during the past few months and is aiming to achieve greater profits soon.

Based on reports, FPIs’ stake down of 400 basis points in HDFC twins- Housing Development Finance Corp (HDFC) and HDFC Bank in the June quarter.
This drop in foreign investor stake has also weighed on their share price performance. HDFC and HDFC Bank have fallen 16% and 8.7%, respectively, YTD basis. In comparison, the Nifty Financial Services index fell 7.7% during the same time period.
Despite this drop, the mentioned selloff has created enough space for the two stocks to be included in the MSCI index following the completion of their merger scheme, which is less than a year away. The minimum foreign room required to be included in the MSCI index is 15%, and HDFC is already included in both indices. However, HDFC Bank is not eligible to be included in either of the two indices on its own because it falls short of the threshold. However, as a result of the merger scheme, HDFC Bank will be included in the MSCI index.

Market finished above the call resistance area at 16600 and that is a positive, which is now being reaffirmed by higher levels at the Sgx. Based on Time counts I had mentioned that a high is possible around Jul 22 and we are trading at the top of the rally as of now. I would suggest taking money off the table in the price range of 16675-16850. On the downside, I would suggest keeping a stop around 16500-16570 as prices trading down there will trip up the indicators away from the positive. Also the strong base formed by options over there would act as the immediate zone of support. Swing traders playing for more can keep stop below 16400. When you play for more you also have to be ready to give off more.
Bank Nifty options positions after yesterday expiry are somewhat neutral. So moves in pvt bank stocks may perhaps determine how it shall flow. Near stop on BN is 36100 while a more distant stop would be 35750.

Nasdaq surged for the third day in a row. Should keep the IT stocks here ticking in their rally.
PVR results were better (profit vs loss in last couple of quarters). Above 1930 stock should continue higher.
Eurozone increased interest by 50bps. This might now lead to curtailing of Euro flows into other markets as countries move to control inflation in their own background. That is a possible outcome but remains to be seen. Just mentioning it in the context of what happened in the US when it started increasing rates.

A robust growth of 41% resulted in Q1 of the total Passenger Vehicle sales. Despite this great news, the newcomers would still face difficulty at the entry level of this sector.
According to the most recent sales report released by the Society of Automobile Manufacturers (SIAM) utility vehicle (UV) segment sales increased by 62% YoY in the same period last year, while passenger car sales increased by 22% YoY in the April-June quarter.
Recently, the government changed the tax structure to lower the price of steel and plastic and decreased the central excise charge on gasoline and diesel. The sector anticipates that CNG prices will soon be adjusted in a similar manner.

Multiple factors are leading to a rise in demand of two wheeler corporations. Ease of chip scarcity and normalization of manufacturing to regular ranges are the leading factors for this upturn. Components like the reopen theme, uptick in demand, and improved mobility are anticipated to drive demand for 2Ws.
Based on reports, the brand new entrants within the EV 2W section maintain a major market share whereas the listed players are but to develop their footprint. In Q1FY23, market share of Ola Electrical, Ampere, Okinawa stood at 23%, 14%, and 22%, respectively. As compared, Bajaj Auto and TVS Motor market share stood at 3.5% and 4%, respectively. Based on the revived demand stocks TVS Motor, Hero Motocorp, and Eicher Motors and expects reiterate an equal-weight stance on each 2Ws and 4Ws.

Prominent names in Fertiliser stocks like Mangalore Chemicals and Fertiliser, GNFC, Deepak Fertilisers etc have risen more than 16-17 % this year. Last budget in May 2022 the Centre has increased the fertiliser subsidy as global prices of fertilisers increased.
This trend may undergo some shift as there has been a shift in the macroeconomic outlook. India is currently staring at a dual deficit problem due to cuts in fuel excise duties. The fiscal slippage that is being seen could compel the government to withdraw or slash the subsidies. With the decline in global commodities the prices of fertilisers also declined and the government too have spent less on subsidies.
Fertiliser stocks can derive some relief as good monsoons have always been positive for the fertiliser firms. While the decision to withdraw the subsidy would not be an overnight decision the constant buying as investors definitely needs to tone down to watch what the centre does at current juncture.

After delivering positive results Q1 FY 2022-23 that surprised the street for the first quarter recovery in this counter seems to be still some time away. Longterm prospects remain encouraging for JSPL, however costs are escalating given the ongoing expansions and captive coal availability however in the immediate term we may encounter some margin pressure.
The charts are also suggesting that we could be witnessing some headwinds at higher levels hence the recent recovery that we are seeing could hit a roadblock.

Havells results were terrible. Clearly costs have been unmanageable and despite near doubling of sales the profits are in the pits. Stock was already down yesterday so the market has got wind of it. Today it should open with a down gap and head lower. Can short after the first short covering is over, maybe. The rounding pattern failure would be another to expect some deeper correction in the stock. Can look for 1150 area as first target.
Indus Ind results may appear optically good but the profits are mainly owing to lower provisions. I cant see market being happy with that. So expect some trimming and should retreat to around 820 I think.
Wipro results too were unimpressive. So, that is the fourth big name that has disappointed. Now the game is up to the second rung IT stocks to save the game for the sector. TCS has slid down to support and stabilising. But only long term chaps will work there while traders may prefer shorts considering that the upside may be capped. Oh yes, Infy is left as the last of the titans. Lets wait for that as well. But today three top mid tier (Persistent, Coforge, Mphasis) for results and that may be keenly watched by the market and shall have a bearing on how IT sector as a whole moves in the weeks ahead.

SGx was slight negative last night but seems to have made it back to the green by the morning. So we may be spared gap opening blushes. So, it will be down to the day's flows to determine the trends. Along with results flow.
Options, traders revealed unwinding action in both Nifty and Bank Nifty. It was kind of, throwing in the towel by the call shorts. Put writers are quite active right into current levels, thereby revealing a bullish mindset. On Nifty call writers shifted higher towards 16900 although 16600 continues to remain a a large OI position resistance. So, once past it we may see some further action. Large put writing at 16500 makes it the important level for supports today.
On the Bank Nifty, we find concentration of positions at the 36000 Ce and Pe so it becomes an inflection point for today. Calls written in the immediate higher strikes. Put writing also seen in 35900-35800 and hence the trailing stop on longs in BN should be placed below 35800.
PCR is 1.29 for Nifty and 1.05 for BNifty, so still comfortably bullish. MaxPain is at 16500 and 35900. Bank Nifty seems a bit more vulnerable as it saw a bit more of long liquidation. Hdfc Bk rally had much to do with the rally. SBI also chipped in a bit although it was not bullish. Hence I am not inclined to bet on BNif for today. Would rather go with Nifty as the support at 16500 is well defined and expiry would be above that I feel.

Syngene International and Zoetis, a US-based animal health company, have entered into a 10-year agreement to manufacture the drug substance for Librela, a monoclonal antibody used to treat osteoarthritis in dogs along with the development and manufacturing of other molecules.
This agreement is likely to be worth upto $500 million to Syngene over 10 year ensuring further development and expansion of Syngene’s drug base.

Post a strong consolidation we can see that the trends are inching higher. The momentum is also reflecting with positive MACD numbers followed by RSI levels also above 70. The price is trading at a strong buying zone. The deal with Zoetis is adding further advantages to the current bullish opportunity in this trade.

Yesterday, brokerage firm Investec came out with a report that gold finance companies Muthoot Fin and Manappuram Fin may both be 'value traps'. I would tend to agree with this. If one looks at the numbers then both of them look to be mouth wateringly attractive. But the stocks are idling
A relative performance chart of these two stocks vs the Nifty shows that both had started under performing the Nifty since around Nov21 and this aspect has only deepened further in recent times. Both stocks have hardly participated in the recent brisk rally of the Nifty and that clearly indicates that larger players have now started shunning them even as they have dropped down into value area.
They may show some oversold bounces now and then but may be ignored as investments until fresh evidence of strong loan growth manifest again.

In the earlier note I had spoken about the Icici insurance twins and Hdfc Life. Market doesnt seem too happy with the numbers put out by the Icici insurance twins. Hdfc Life has been pushed lower and may continue its downward drift.
But the other life insurance stock SBI Life, has been faring considerably better and is seen striking out higher now. Chart pattern on this one is far better than the others and its relative performance too is much better compared to the other three and LIC too. We aer seeing Put shorting as well as long Call build suggesting some continued bullishness in this counter.

Most IT names have been rallying from oversold levels. The leaders have not really obliged with good numbers or commentary. This now puts the onus on the second rung IT names to perform. So far, LT twins have come out with some decent numbers. Tomorrow we have three big names declaring results, including Persistent Systems.
Among all the second tier stocks, Persistent is an out performer. The others are KPIT and Intellect. As can be seen in the chart, buying seems to have emerged in Persistent at the current levels. If results and commentary are good tomorrow, then the stock can get a further leg up. Punts can be taken in anticipation of something better as risks are pretty low and stops are nearby.

First Icici Pru and yesterday Icici Lombard- both came out with decent results. Prices ought to look up. The pattern on I-Lombard is better and that can be bought for a bit of a run. Immediate target is around 1310-20. Beyond that, it could give a faster run.
However, results from Hdfc Life were poor and we could see some switchover selling from here to either Pru or Lombard.

Polycab came out with good numbers and the stock surged yesterday on high volumes, high delivery % and fresh OI adds. A bottom is in and now the stock will be in a rally mode for a while Multi day trades are indicated at current and on dips. Range shift signal in Rsi daily suggests more gains ahead. A run towards 2450 seems likely.

Hind Lever is already on an upmove. The results were good. 6% volume growth can be considered very good given the challenging conditions. Stock ought to continue higher.

Big addition is to the 35500Pe in the BNF so that now becomes the base. OI additions to CE are still limited. Its a bit different in the NF where we find 16300Pe addition along with 16200 as a back up build ensures that the dips will be protected. But we also find goodly addition to 16600Ce. So that makes for a 300 point range for the Nifty. Hence between the two indices, it is the BNF that seems a bit freer to continue higher on Wednesday.
On the charts, BNF is already at the top end of the cloud and we have a flat line SenB at 35900 and we also have a kumo twist on the daily. So that is additional evidence for longs on Bank Nifty The Call OI build is at 36000. A chart target is at 36140. So that is probably it should head to first.
As mentioned yesterday, the NF has pushed into the cloud and if it bounds up faster then we have room till 16900. KS line on the daily chart is at 15850 and that can be used as a stop on pending longs.

The UsdInr pair has been progressing briskly in recent days and there is a big tussle going on at the 80 level. The RBI has now come out in full force to keep the Rupee from tumbling over even as the INR breached the 80 mark in offshore deals. The Euro has bounced a bit after hitting a shade under parity. On the charts we find some slowing of momentum and hence it may be time to tighten the stops on long Dollar positions vs the Rupee. Reports of exuberant shorting by traders may also create a situation where some covering may be triggered if movements go against them. The chart shows a trailing stop indicator that runs along 79.9220 levels as of now. The next halt level would be large enough to take a reversal trade in the pair as prices have also slipped beneath the active low lag moving average.

Sgx shows a cut and it seems that efforts to hoist the indices higher are coming a-cropper almost immediately. Similar to the Fri-Mon situation (traders leaning towards shorts), the Mon-Tues situation is opposite- with traders leaning towards the long side. Now this will pressurise the market with non performing longs and if matters dont improve within the first hour after the open, we should see long liquidation creating and maintaining that pressure through the day. There really doesnt seem to be any bad news floating. So one presumes that it is linked to the late decline yesterday at Wall Street. Starting today, there are heaps of results to be announced across the week and hence market's attention may be diverted from this useless pursuit of reacting to every squiggle in the US markets.
The short Put at 16200/16100 collected at least about 50 points of premium and hence one would expect those sellers not to be shaken until 16050 areas are taken out. So the two stops on the way down is the gap area at 16150-16050 zone. For the upside, earlier targets continue to remain open. The proviso is that if price action upwarrd happens faster then we can achieve higher targets but if the pace is slow then targets may be lesser. This is because the resistance zone is coming down with some rapidity.
Under these circumstances it is best to stick with short strangle trades, playing for a range to continue if playing the indices. Stocks with good results would be the better target for traders.
Fed Bank is one that I have picked for some multi day trades with a potential up to 110/116/122. For such plays, however, note that one will have to engage in multi level buys and sells as the stock is not famous for fast moves. And, exercise patience.

As expressed in yesterday note, Nifty saw short covering while the uptrend of the day helped the BNifty to create fresh long. On the Nifty, we find clear Put shorting evidence at the 1620 and 16100 strikes and harldly any Call shorts. Likewise, we also find a big build up of Puts at the 35000Pe. Evidently, at the end of the day, option traders seem positioned for more gains to accrue in the indices. It also appears that long CE positions were built and Long was about 10x the put longs.
Even if BNF gets it together somehow, it still seems that Icici Bk will have to out do what Hdfc Bk shall do to undermine the bullish side. Hence it seems to me that the other bank majors like Sbi, Kotak and Axis will really have to pitch in with gains for BN to move higher. So check those 3 closely while watching Hdfc Bk for weakness. If it can save itself from the blushes of declines, then BN can have a shot at gains. Below 1350, Hdfc Bk would continue to be weak.
Given this picture, I would rather prefer trading in Nifty for a day or two.

With a new GST levy of 5 percent on room rent, excluding ICU, exceeding Rs 5,000 per day per patient charged by a hospital. The tax will be without the input tax credit option. The new levy is effective from Monday, July 18. With the possibility of revenue going higher stocks like Apollo Hospitals, Narayana Hrdulaya,Aster DM and Fortis would be in limelight.

The upside gap indicated over the weekend seems to be holding into this morning too. It should vault the NF over recent consolidation highs. I have been maintaining a bullish stance for a while and continue to be long. Aggressive stop for longs would be 16100-150 area. Giving a little more room to breathe, the stop can be just below 16K.
As mentioned in the earlier note I posted, I am looking at short positions in the Nifty to drive trends higher today. The next time count is seen around the 22-23 July and I expect the current rally to be near its highs around that date range.
Fed Bank results were encouraging and should help drive prices higher. Holding above 100 levels ought to keep it going. BEL results were good and price action is positive. Looks good for continued advances.
Stocks from Auto sector continue to look good. Tata motor above 445 should get into some acceleration. Longs in Maruti, TVS Motor should be continued. Eicher gave a bit of a shakeout but is seen resuming uptrend again. So longs are indicated. Escorts is revving up and can also be looked at.
No big names for results today so market shall concentrate on the results declared last week.

Nifty OI increased from 127L contracts to 143L contracts in the last week and prices dropped. So it seems like shorts have been created by retail as well as FIIs. On the other hand, Bank Nifty OI dropped with the fall in prices and hence can be considered to have been long liquidation. With Hdfc Bank unlikely to cheer and other banking chart not looking so good, it is possible that we may continue to see BN drop or lag any upmove in the market. So one should be looking to trade in Nifty rather than BNifty on Monday.

The derivative positions are not looking too healthy at the end of the week. Over the week, the FIis have cut index future long by 29% and added future short by 34%. They have also added index call options short by 26% as well as added index put long by 26%. PCR is at 1.12
with good distributions on either side so that may signal some ranging action if the good open is not capitalised upon. Bank Nifty however seems to have more Call shorts and therefore the bias is still a bit negative. The PCR is at 0.81.
We have to see how these positions fly if the higher open being suggested by the SGX over the weekend, sustain into Monday. The bearish bias shown by the options data at the end of the last week could come in for a squeeze and that may create some further upward drafts.

Hdfc bank results doesnt look attractive on several fronts. Chances are that it will not be received well and we should see some selling emerge. How much it will fall is dependent on how much of the not so happy results are discounted in the current price. My sense is that the prices will come down to do a retest of the 1285 lows seen recently. FII have been reducing their holding but DII have been absorbing most of that. It is possible that the Bank could take a quarter or two to recover to former rising pathway. At such times Inst buyers take a step back. Already, stocks sold by FII have been taken up. FII holding is still around 32% while DII own about 27%. There is room for the FII to sell more but can DII take up more? That is the key. I prefer to have a bearish bias and would want to be proved wrong to buy the stock.

Market continues to be a bit dull and listless. Nifty has been maintaining a small range. However, BankNifyt has been weak and extending the losses seen yesterday. I had earier mentioned that upon a decline BN may seek levels upto 34400-500 area. That seems to be playing out now. Nifty reached the support zone given yesterday at 15880 and is still placed around it. Options activity seems to be strangles of 15900-16000 being traded today. However, BN is seeing more call additions higher levels. For the day option traders seem to be playing a small 500pt range and hence it doesnt seem like there is any great expectation of trended action for the rest of the day.
Metals and IT continue to be pressured while Consumption and Auto are seen faring better. LTI, post results is placed flat. But Mindtree is still a bit weak.No respite for HCL Tech as it continues to decline. Same with TCS. Leaders tumbling is not a good sign as midcaps will soon follow in that wake. Remain short on IT names and add during rallies. Tata Elexi is the only exception. Camme with great numbers and prices are up. Best switch even at these levels from other IT names.
From Auto Maruti and TVS Mot continue to look to be the best bets. Tata Motors may gain legs after crossing 445.

Fuelled by a low base effect, auto sales grew 55% in Q1. That looks like a good number by itself, anyway and points to improvements in the economy. Most telling in these numbers was the surge by Tata Motors to no.2 position behind Maruti. That is a tremendous achievement for a company whose products were (and probably still is) shunned in the market place by car buyers. Nexon has really been a game changer for TaMo. On the charts, Tata Motor may develop fresh legs once prices scale and close past 440. That si the level to watch for initiating new trades.

So, the whole drama with the CPI nos came to a naught as the markets opened better and are now seen trading better. Now with macros out of the way, perhaps we can concentrate on local issues. Bank Nifty clearly trading better than nifty. A hint of this was given in the morning when Pvt banks were placed in the green. As mentioned earlier, a move past 35100 will bring some fresh fuel to the counter. The Nifty is having a positive braedth as of now but nothing strong enough to pull the trend up. So, Bank Nifty it is for trading today.
Pharma is in some action today- after quite a while. Some news was there in Glenmark and Star and good action is visible in Granules. INdeed, top gainers today are almost all Pharma counters so it is possible that some pharma fund is in action.
Mindtree nos were a beat on expectations but market doesnt appear to be impressed. it has squeezed other IT stocks too. So, if inclined to short, this sector is still the place. MTree was neutral ahead of the results so its decline may well be a combination of long liquidation and fresh shorts. Seems to have room for 2730/2600 levels.

SGX went on a knee jerk decline with the rest of the worl post the US CPI announcements but has managed to claw back most of that fall. It is set to start with a mild cut. Importantly though, the roiling of the sentiment by whats happening in the US may continue to keep a lid on gains in the rest of the world markets. We reached a target zone near 16200 and long holders have lightened up. But now that main macro events are out of the way, the market will probably start concentrating on local events and results.

Nifty needs to move past 16050 levels to get back on its feet again. So until that happens, we need to presume a bearish bias. Similar point for the Bank Nifty is around 35100. For bullish trades on indices, wait for these levels to be taken out.
On lower sidee, gap support exists around 34450-600 for Bank Nifty and 15885 as a multipivot zone for the Nifty.
PCR is above 1 for both NF and BNF, so weakness, if any, may find put sellers in some trouble. Large OI exists at 15800 and 15700 Pe strikes. On the flip side large OI concentration at 16100 and above ensures that upside attempts may prove difficult today. In Bank Nifty call additions upto 35300 strikes ensure a resistance above.
Hence based on option OI activity it seems difficult for market to move higher today. So concentrate on stocks with news for bullish trades.

ACC and LTI are due out with numbers today. ACC already hit down into support near 2050 and reversed. Now if numbers can tip prices above 2215, then we could see some gains occur. It may also trip buying in Ambuja and other cement pack as well. LTI has eroded 50% from its high and trend strength is lost. Currently prices are in the middle of a range. Support is around 3650 while immediate resistance to overcome lies at 4280. Use those for reference.

Domestic Mutual Funds will look to get back into action on new offerings as the 3 month embargo is set to end. The mutual fund houses look to launch a series of NFO's in equity and hybrid categories. There will be an effort undertaken to look at stocks that have reached fair valuations in the recent fall. Also, there is a pentup demand that is brewing up indicating that we could be looking trigger some buying interest in the markets.

For reasons not quite clear, the BNif turned weaker compared to the NF today, right from the start. This, despite a gap up open. Nifty tried rallying a bit but none of the big ones chipped in and it seems to have given up the effort and prices of both the indices are down into the daily pivot zone. Activity is at a low ebb so far. Breadth readings are about even. Option sellers are having a better time as of now. Seems like the market may be waiting to get two important macro data - China IIP and US inflation- out of the way before seeking further pathways. The absence of any active selling points to a continued but slight bullish bias. Lots of people had targets for the Nifty around 16200 and having reached it, money may be being taken off the table.
FII index short positions have fallen fromaround 1/46L contrancts (June mid) to around 62k contracts by last week. Evidently, they have used the softness to trim their shorts. This has not been followed by any additions though, despite the near 1000 point rally in the Nifty. It is likely that some of that rally occurred owing to the short covering by the FIIs.
For the balance of the day, we may continue to see some dull moves. Pvt banks have stopped sliding so there may be just a slide in the BNif but its support is near 35000 area. Nifty is pretty range bound.

OMC stocks bearishness spoken about yesterday was curtailed swiftly as oil prices crashed 7%. HCL Tech results dont really seem to have spooked IT stocks any further. So now maybe we have to look for good news to proeduce some gains in stocks from the sector? In the market, often, if something expected is not happening, then one should also look for the opposite to happen.
Metals are not going any lower. Maybe the expectation that the steel export duty may be rolled back is keeping them afloat. There are demands for it as steel makers complain that the local offtake is not as much and they are losing out on remunerative export markets.

Market is expecting huge losses for the oil marketing trio of HP, BP and IOC and a figure of around 10700cr of loss is being talked about. Soaring crude prices and petrol and diesel prices have remained unchaged in the quarter have led to losses. They are said to be losing around Rs.12-14 per liter on both petrol and diesel. GRM has also dropped from the highs a few months ago and will add to the wores.
Charts of all the three stocks show continued pressure and can be picked for shorts as there is room on the downside. May have to be multiday trades as these stocks tend to mvoe slowly. Among the three HP is weak and has just finished a rally. Can try using Put options to play the short side too.

These views from a friend who I respect for his deep introspections on the markets:

The fall from 18115 in April to the lows of 15183 has been characterized by significant gaps and consolidations for 10 to 23 days after the initial gap down move. Now, for the second time, a gap up move is being attempted and should 16k hold, this consolidation could take us to 16400+. For this, there has to be a global risk on push and at the moment, dollar strength is the biggest obstacle. The immediate trigger that everyone is focused on is the June CPI print that will come out tomorrow but for the most part, July 75bps is a shoo-in. What is interesting is that one FED Gov has sounded the bugle on being too aggressive on the rates front and the risk of unintended consequences. What no one seems to want to talk about is the risk of unintended consequences from QT that no one has a reference point at this time. Yes, we had a taper tantrum but this time, we have extreme inflation and slowing growth, globally.

As expected the BNifty has been trading better compared to the Nifty post open. However, the set up in the Pvt bank stocks doesnt appear to be too solid and may prompt some declines before righting itself . Keep 35250 as the cutoff below for considering more dips towards support.
NF is still within a small range and showing no particular bias. Neither do the main stocks. So some dull times, perhaps for the first half?
Metals are seen weak again and day traders can attempt shorts. IT majors also remains pressured but the second rung seem like exception (Persistent, LTI etc). M&M Fin which I had signalled earlier seems to be continuing its positive trends.
One has to search for bullish counters at the moment. That is seldom a good signal. Hence better to avoid that and take only stronger signals as and when they set up. Similarly so on negative side. Hence better to be on the backfoot for now.

The Singapore GRM has dropped sharply and this may impact Reliance negatively. On the charts the price level around 2400 is an important support. If that gives way- seems likely- the prices may slide further. This would, in turn, impact the Nifty levels.
So that is something to keep an eye out today.

Market, as per option OI positioning, seems rather evenly poised. Call writers are not as aggressive nor are put writers. So NF seems evenly poised. But in Bank Nifty we see a slight bullish bias and hence it is possible that the Banks may perform in this week as well What we need to watch is the action of leading Bank stocks. 35200 proved difficult for BN to cross on Friday so this can be taken as the nearest resistance for BN. Gap at 35000 will act as a first support and if this is lost (which may happen in a weak open), then next support is not visible until 34500 area. Similar set up exists for the NF as well. 16250 is the built up resistance on the chart. The more meaningful gap support could be around 16000.
Last week we got a small tailwind from Crude declining. But its back in its rise again so that trigger is going to be missing. TCS kicked off results season but failed to cheer the market. Expect subdued response form the stock today. Impact on the sector may occur only after a few more IT majors come out with their numbers.
Charts of L&T (some positive newsflow) and M&M Finance appear to be set for more gains.

As expected, the Nifty high for the day was recorded near the open and thereafter the prices have been drifting lower slowly. There have been three attempts, so far, to take the market lower but none of them have seen follow through price action. It is also worth mentioning that bounces from those pressure attempts have succeeded only in making intra day lower tops. So that is not a good signal either. Banking stocks are all losers post open and that is putting pressure on the Bank nifty as it drifts lower. No bullish activity is visible in the mid and small cap areas as well. So, it seems that the market is content to hold the current levels and see the weekend off. People have got a chance to exit from their longs so closing should not be a pressured event today.
Intraday option activity is visible in 16200Pe and 35000Pe. Both are ATM levels. So nothing directional at the moment. PCR is highest at the 16100 straddle so it seems like that is the position being created intra day today. Straddle cost is around 297 right now.
India Cem is top gainer with high OI additions intraday. Prices continuing above 174 would be bullish.

While the Sgx may be hinting at a strong open, we have certain data points to watch for:
a. Oil climbs again on reports of shortage of supply looming.
b. 10y treasury yields climb above 3% again stoking recession fears in the US.
c. S&P was up for 4 successive sessions so far. Weekend looming, may see profit taking.
d. Likewise, we also may see profit taking at higher levels.
e. TCS numbers not expected to cheer the market today.
f. Fed officials back another big rise in interest rates in July.
g. US jobs data due out today.

The Sgx is nicely up so we should have a good beginning. Yesterday trading revealed positive breadth being maintained all day. So long positions may dominate and some of those will look for exits upon a higher open. Hence there may be some trimming soon after open. But the trend doesnt appear to be in any danger as the downside resolution point is far away (around 15750 area). So dips are to be bought on intra day support zones, if reached.
Situation is similar with the Bank Nifty. Yesterday post I had mentioned that the BN is trading better and it continues to be the case. It seems slated to reach 35600 if the rise were to continue today. The ratio chart of the BN and the Nifty is rising (current 2.15) and if the values were to move past 2.20, then we may see further acceleration in the Bank Nifty. So do keep an eye out on banking majors today. We see a strong addition to OI of 34900Pe, all the way down to 34500 with very little addition of Call OI above. Market here clearly wants to go higher. In support of this view, we also find additions to Put OI in the Nifty too.
Go long with 34800 stop would be the working trading for today. If a big gap up, buy the end of the first intra day dip of the day.

In a bid to save the slide of the INR, the RBI seems to be going all out. Making a slew of announcements designed to bolster the inflow of foreign currency, the RBI signaled that it wil resort to every avenue possible. It is also getting the govt to act on various aspects of inflation (not that the govt needs to be prodded) and all these should prove to be positive for equities. They levied export duty on Steel. Now they have levied on crude exports. They are asking vegetable oil producers to cut prices. Etc.
Markets are up some today but people seem to be taking their time. Not unusual considering that the sentiment was damged and the newsflow from overseas continues to be negative. The Dollar Index, for example, continues to climb. This is owing to a combination of reduced Dollar supply in the US and combined with inflationary trends in world economies coupled with interest rate hikes. Perhaps that is having a continued impact on the currency.
Fortunately crude prices have slipped and this should help matters. Stocks that has slid sharply on high crude price expectations may be worth a look? The bigger picture is confusion to the FII houses too! JP Morgan has given a call for $300+ targets while Citi is aiming for around $65!! And both have given their cogent arguments for their targets. This is why I say that the bigger picture is one of confusion. We need to see what is in store for us rather than the US. Russia striking rich oil finds in their ocean backyard is good news for us. We doing deals with Iran can be good news for us.Ultimately, we need to know what is the basket price for our crude.
Lots of stuff going on. And now, TCS will set off the earnings season from tomorrow. So some local stuff for markets to concentrate on- leading to reduced focus on overseas triggers.

Market has opened and traded better with 16k holding so far. Breadth is positive with all indices and sectors in the green. But higher levels are used to trim longs as we find that the braedth has dropped to around 47% bullish compared to 84% bullish when seen from last close. So fresh buying will need to emerge for the market to continue higher. The Bank Nifty seems in better shape this morning campared to the Nifty. Psu banks are trading better than the Pvt ones. Financials are a bit soft. Hence it will be up to Psu banks to carry the BN? Seems tough unless SBI gets into a tear or other pvt banks begin to look up. So for BN traders, watching the pvt bank leaders should be the main focus.
PSE units are up nicely so that needs to be watched for some gains and contribution. Realty is another one that is trading better. Auto continues to do ok.
In stocks there is nothing that stands out. So we may have to wait for some fresh signals.

With a view to curb the runaway weakness in the Rupee, the govt has slapped additional import duty on gold to rein in the trade deficit. There has been a sharp increase in the imports of gold in May and June and this is pressuring the trade deficit and consequently forcing the Rupee lower.
Local gold prices rallied in response. Continuation above 51650 and staying above those levels can bring in some additional gains to Gold futures at the Mcx and the last swing high near 53600 could come in for a test.

Some additional new tax (windfall tax on refineries) has led to a sharp fall in Reliance. Down 7% at one time, the stock took the Nifty down sharply today. Now, if we can find the bottom of Reliance, we can call for a bottom of the NF for today. Using Neotrader I find that Reliance dip was to the level of L4 on monthly Camarilla pivots. Today is July 1st. So, on the very first day of a new month, the L4 level has been hit. This can lead to two conclusions. Either there is a reversal from the L4 level of 2385 (which will be bullish for the stock) or stock may continue lower, breaking and going below the L4 level (which will be bearish for the stock). Either way, Reliance is going to decide the fate of the Nifty in the immediate future.

Matters were a bit flat in the morning until the Dow furture started dropping. This fell sharply, dragging the nifty down intra day. Most intra day players were ready to bid goodbye to the bullishness for the day. But the Nifty staged a nice looking recovery from those lows despite the Dow not really moving up much. So, correlated, but perhaps not all the way? Or is it expiry day considerations? The low at 15700 being defended, it would appear. The Put-Call OI is converging towards 15800 where the Max pain is also present, so it seems like the market is likely to expire near those levels today. If this is so, we should see some expiry-based Put shorting emerge by the moneybags to collect premium. let's watch.

Market began well and has been holding up as well. Banks are to the fore today and that may persist for the day as we find all three segments (Pvt, Psu and Financials) in play today. Intra day dips in BNF should be bought. Yesterday we find short OI closure in Bank Nifty and addition in the next series. Roll spread has remained flat so there doesnt seem to be much of a pressure on rolls . This is so on Nifty rolls too. June series OI in Nifty is higher on the last day compared to the last month and hence we do have trading longs created on the Nifty that may get booked at higher levels today.
Today's options activity seems to be at 15400Pe and 16100Ce. In Bank Nifty it is at 33500Pe and 34500Ce.
Axis Bank and SBI are leading the way in Banks and longs can be tried in these two.

The signal of the strong writing at 15700Pe told us that market may move higher and it has. Nifty is edging higher slowly. The PCR at the 15700 strikes moved to a peak of 2.89 and is now halting as the activity seems to have shifted now to the 15800 strike. The Pcr there has moved up from 0.9 earlier to around 1.10 now owing to the new writing in the 15800Pe. Signals continue to remain bullish and looks like NF may make an attempt for 15860 areas now.
Bank Nifty is however, just following in the wake of the rise of the Nifty and lacks independent action of note.

Looking at the sharp addition to the 15700Pe it would appear that the bulls are making a stand here. The PCR at the 15700 strike is at 2.1, implying that there is a strong addition to the Pe. The call selling seems to be in 16000Ce. So if one is long in the Nifty for the day or ahead, then the nearest stop could be 15650 (the strike less the 46 points premium that one is getting for it just now).
Bank Nifty still seems to be struggling. No fresh trends visible there. Seems like it is still handling the issues from yesterday positions.

Seen from the last close, the breadth is almost a washout with a big declines number. But post the gap down open, it appears that buying has come in because we find a sharp reduction in the bearish breadth. Now that is encouraging- if it can sustain. Given yesterday's strong undertones towards the close, I doubt whether much shorts were there so the buying of today morning cannot be short covering of Btst positions.
Sectors are in the red with some minimal resistance put up by metals so far.
Too early to tell whether revival from the gap down shall sustain. But so far, it doesnt seem like a big decline. However, the strength of yesterday, coupled with the bullish expectations may have led to creation of longs that may be awaiting a chance to bail out higher levels today. Hence big upsides are also not possible.
In addition, as mentioned in the morning note, the market is likely to await the US Gdp numbers due out there today and that may add to then hesitancy in creating any fresh positions.
So, chances are that dullness may prevail after a while. Roll activity will keep some very lmiited stock moves going but we should avoid getting trapped in those signals.
Intra day short strangles may work.

SGX shows a cut in the morning. This is disappointing as one was looking for advances to occur and the market did hint at that possibility. We did need more positive action from the indices in order to seal that but it appears that the market has us waiting. The weekly CPR is placed at 15475-625 zone and that may be the area to expect the support. Since this week CPR was an overlapping one with the last week's, the bullishness was anyway likely to have been limited.
We find Put writing occurring at 15500Pe yesterday so that is, kind of, reinforcing the support status near the weekly pivot. We also have some gaps in the zone of 15550-600 area that might continue to act to provide support.
This kind of to-and-fro moves are to be expected. We are not going to have any smooth move upward. So be geared for it by making moves multi day if you wish to take bigger sized moves. Else be quick with finishing the trade one way or the other within the day. Dont leave trades open for next day unless you plan to do multi day plays and have the nerve as well as the capital to do that.
There is no specific local news for the markets to react to. Hence everything shall continue to focus on the US. The GDP data is being released today. So all eyes will be on it because the numbers and the commentary will clue us about inflation trends expectations in the US for the months ahead. So, maybe market may open soft but may not really drop too much during the day as traders shall await the GDP numbers in the US and how their market receives it. Hence, activity today may remain maily rollover limited in stocks and adjustments for expiry tomorrow in options.

Post open, both indices show very small traction to either side. But having opened down with a gap, the ball is with the bears- until proved otherwise. For safety we should have an eye on the lower levels that need to hold if bulls have to salvage and these are 15715/33520. So, any longs created or pending in index trades should have this as a stop- and possibly stop-n-reverse- as a trade. It is quite possible that today may remain a choppy day as sentiment hold is still limited.
Autos are still in play and within that M&M is in demand. TVS Motor is the other one. IT seems depressed today after a decent showing yesterday. Inability of trends to last beyond a day shows that most action is either day trading or short covering buys.

Post the better open, the market went nowhere yesterday. That was disappointing because there were expectations of a revival and indeed, when the first of the resistances at 15865 (Jun15 long body candle high) was exceeded nicely. But trends stalled and today morning, the Sgx is indicating a mild cut. We have to go on the assumption that the bulls still hold the reins and hence support zones (earliest near 15700) will be held. So with a tight stop below that, one could attempt to go long on the first decline today. Speed will pick up only when the NF can cross 16000 levels. So, for larger positions or multi day plays, that trigger needs to be awaited. On the downside, if the support at 15700 doesnt hold, then we could drop all the way till 15400 before the bulls can recoup for another attempt higher.
Bank Nifty can drop to 33700 area to seek support but this too has to get past 34350 zones to pick up some traction. But anything upwards of even 34150 ought to be ok as it will get prices out of the confines of a pitchfork resistance. So these are the levels I would map for setting my index trades for today.
In stocks one should watch Auro Pharma for some weakness on the back of a rather scathing letter from Sebi to them. Chart is bearish and new break down is awaited.
M&M is on a run. News of the fresh model of Scorpio may drive trends further. SUV market is the hot one currently.

In the morning note I had mentioned that we could either trade a breakout or a dip into support. Market has not been strong enough to stage a breakout but the Bank Nifty dipped into the buy zone given and rallied nearly 200 points from those lows. Anyone taking that as a trade should have benefited.
The Nifty also dropped during that fall but didnt go as deep as had been expected for it.
For the stocks, situation has remained more or less similar from the open. IT, metals are still the gainers, the advance-decline numbers (post open) continue to remain evenly divided,
Not expecting any big changes into the close. Stocks from active sectors today may turn a bit more positive as the day ends. But nothing specific stands out.
Those that have created longs and prices havent moved yet, can consider carrying the trade forward. Dow futures are trading better during the day and market is tending to move higher. So, longs may work out if the stock picked is in a decent trend on its chart.

Since we seem to be only reacting to global events these days, perhaps we should know what lies ahead during the week as events. Here is a small list"
G7 Summit
Scheduled for 26-28 June. Mainly of note if there is any escalation of war in Ukraine or China making noises about Vietnam. Else it may pass off with some sabre rattling.
Dollar Index
After some slide, the Dxy rebounded late last week. Some important data releases this week encluide Consumer Confidence (Tuesday) and GDP numbers (Wednesday). These shall be watched by the market and also the PCE numbers on Thursday. Moves in the Dxy will be driven by these.
OPEC+ meeting
Oil prices will be ruled by the decision at the Open meeting this week. No surprises are expected though.
US DDP data
This is an important trigger that market observers and investors need to remain vigilant next week. If the numbers are disappointing, then speculations for slowdown in the US economy will get further strength leading to sharp selling in global markets including the Dalal Street.
UK retail sales: 
With UK’s inflation at a 40-year high reaching 9.1%, consumer spending and budgeting have taken a toll. Considering 25% of the FTSE 100 – stock market index of the UK – consists of consumer staples and consumer discretionary companies, this retail print will be critical.

Following positive advices from overseas, the Nifty opened well but has been unable to trade higher. This is the fate of the Bank Nifty as well. In stocks we find that the starting breadth is placed neutral implying that the higher levels of the morning have been used to book out on Btst trades as well as whatever was held over from earlier.
Nifty reached 15930, thus moving past the long body bearish candle high (15 June) at 15865 and that is a positive. I wrote a weekend analysis for Bloomberg Quint where I stated that we may have made a durable bottom on Jun 17 and one of the things that is needed to occur is a steady overcoming of resistances above. The 15865 level was the first of those resistances.
All indices and sectors are trading in the green. Small cap index is a good gainer indicating retail investors back in the market. In sectors IT and Metal are up and both of these are sentiment influencing stocks. So, one could look for some improvement further a bit later in the day perhaps.
Since market has opened and traded ok so far, we can look for breakout buys in the indices. Above 34225/15935 would be the levels to look for. We can also attempt buy-declines. The levels for that would be 15775/33810.
Among IT stocks TechM and FSL could be looked at, along with LTI and Persistent.

Charts of four base metals are shown and we can note immediately that all of them are in confirmed downtrends. Copper and Aluminium being the more traded items are already into a strong downtrend while Zinc and Lead are breaking down afresh to continue their downtrend after some consolidation.
On the weekly charts we can also note that there is a decisve break of the trendline drawn from the lows of 2020. Breaks of long lasting and well tested trendlines are not good news for bulls.
Hence it appears that base metals are in for a long haul in the downtrend and all rallies in the near future shall only create lower tops. Traders in base metals need to favor a positional short with periodic adjustment to provide for rallies that can be sold into as they finish.
On equity side we have direct proxies for these only by way of Hind Copper and Hindalco and Vedl. All of these have also got plastered (particularly Hindalco). The expectations of some dilution of Hind Copper stake kept its prices higher but that hope seems to have been given up of late.

So far, the Nifty 500 is almost in sync with the Nifty, losing 15 per cent from the October market peak. However, a dissection of the index constituents show deep cuts, With 21 stocks nosediving over 50 per cent, and over 150 stocks losing 30­50 per cent. In all, 83 per cent of the Nifty 500 basket has corrected. In fact, nine stocks have wiped off the entire gains made from the March 2020 lows — prominent among them being Whirlpool, HDFC AMC and Mahanagar Gas.
Compared to this, the performance of the stocks managed by us for clients have fared considerably better, with just one stock taking a hit of around 50% and that was because of a policy changed announced recently for the Sugar industry.
Moral of the story is that if stock selection is proper, then your portfolio can buck the trends of the overall downtrend in the market.

Among sector indices moves in the last week, Metals were the only one to finish poorly (down 4% for the week). All other sector indices improved with Auto notiching up the best gains at 7% for the week. In a market devoid of some safe havens, Auto stocks stood out like some islands of safety and therefore we may see some continued interest in auto names in the weeks ahead.
As far as the rest of the sector indices go, they all seem to have staged a mild rally and hence no specific signals are visible on any of those charts.
In Auto, one can take a look at Hero Motor, M&M and TVS Motor which have the best charts for short term plays.

The RBI has based all its arithmetic on a basket price around $100-105. But oil prices have remained elevated above that in recent weeks and months. It is expected to remain that way for some more time to come.Supply constraints are expected to continue even if there is a ceasefire because sanctions may not get withdrawn swiftly. China economy is expected to come back on rails after the recent lockdown and this may create a demand push.
Every $10 increase in the prices impacts our inflation with @50bps rise. RBI has laid plans to combat inflation up to 5.7% or so for FY23. Higher oil prices may push inflation higher. Crude imports form about 30% of all our imports. A rising cruude price will bust the CAD, sending the Rupee even lower. We are already at the highest trade deficit since 1994. Managing the currency so far has depleted our foreign currency reserve from 630bn to around 596bn now. The RBI may have to do some rethinking on its choices and perhaps may have to allow the Rupee to weaken further.
The Dollar is strengthening across an entire basket of currencies, though, and not just the Rupee. Indeed, the Rupee is doing relatively better compared to many others that have depreciated far more. But that brings problems of its own as our exports become more expensive and right now we need to up our exports in order to rein in the CAD.
So, a complex set of elements at work. At the ground level the trader has to work with one correlation that matters- a weak rupee leads to a weak equity trend. Thus, recoveries in equity markets will need some kind of stabilisation in oil markets so that it can create a positive domino. Keep tabs on oil prices and the Rupee to know the larger trends.

Read an interesting article on Finshots this morning (check out their website finshots.in) about how Underwear and T Shirts can actually be indicators of recession or the advent of it.
Apparently, this is an indicator followed by Allan Greenspan and the like! The logic is that when recession hits, men tend to spend less on their underwear and on TShirts (or value fashion, as they are known).
Two proxies for these two items in the listed space are Page Industries and VMart Retail. Fortunately for us here, botht hese companies are showing continued robust sales for both these items, despite some increase in cotton prices. Inspite of the price being passed on, the sales of both underwears and TShirts have increased.
So no signs of recession in India, then. Let the US shout about it. No need for us to pay too much heed to that.

In the morning I had mentioned that either a breakout buy above 33620 or a dip buy to 33450 would work. The dip during the day took it to the support zone defined and prices moved to a high at 33738 so far, making that a nice trade if taken. I had also mentioned that the 33000Pe was being shorted and for those who favor options plays, a short of that strike (then quoting around 220) would also have played decently as prices drop too around 165 levels.
Nifty also kept pace with the moves in the BNF as had been discussed and it has been relatively unable to forge a trend by itself today and prefers to follow.
At this juncture, trader sseem to be preferring the Nifty to the BN as call writing there is seen at higher strikes compared to the BNifty. Hence those long in the BN futures may think of protecting their profits with a tightened stop. The target zone we can look at for the BN is 33775-860 while in the NF it would be 15740.

A slight positive at the open which has been held so far. All indices in the green. IT is the only spoilsport to the rally attempt of today. Most stocks from there have slid a tad. Pvt banks are doing better today along with Fin services and Psu banks and hence Bank Nifty should do better for the day. For day trades it can bought above 33620 or on dips to 33450. NF may be expected to follow in the wake set by Bank Nifty today.
Among stocks gainers are spread a bit too widely for any sector bias unlike on the negative side where IT is soft. Higher levels of the day so far have been used to exit from some pending longs. As of now the breadth situation is about even. Being a Friday, not much aggression may be shown by traders.
In BNF, 33000 Pe is being sold so bias is upward. High call addition in the morning has been in 34500Ce. So some room for market to advance if it decides to do so.

The way the market has fallen from the higher levels (it went to the projected high for the day) seems to suggest that the short covering activity may well be over. Looking at intra day activity in Options OI, there was a big add in 15400Pe and prices have drawn down to that level as of now. But the strong sell off has prompted that adventure and now activity seems to have shifted below to the 15000Pe. in the weekly series. On the call side shorting is seen in 15700 as the shorts at 15500 got covered.
Bank Nifty on the other hand seems to be attracting buyers of puts and so the weakness there may persist perhaps. The current range of activity there seems concentrated in the 32500-33000 strikes. If the main game for the day is over, then prices may finish in that range only.

The forward premium yield on the INR has been sliding and has now hit the lowest levels since Nov 2011! A smaller forward premia makes carry trades less attractive for foreign investors. This could possibly explain the continued selling by FIIs in our market. As they continue to unwind their positions, the INR continues to remain weak. Alongside, this also prompts low hedging by exporters and that contributes to Rupee weakness too.
The RBI is not selling dollars in the spot markets but in the forwards markets, and this is also complicated by some bit of dollar funding stress is evident globally as well. Given this background, we should expect some further weakness in the UsdInr and that will also translate to continued pressure on equities.

Market seems to have shrugged off the bearish influences of yesterday and set about on a firm footing today. Hauling itself above the call OI concentration of 15500, the index may now trigger some short covering that may propel it towards 15620-680 levels. For the day we can keep 15460 as the support zone to buy into. Bnk Nifty vaulted even further than the NF in terms of crossing higher resistances for the day and therefore the intra day support for this one may now lie at 33250 area. Like I had mentioned in the morning note, flows will determine trends and with expiry today, we could see short covering being induced to keep matters bullish. The two lower levels mentioned above for the indices can be kept as a stop on any longs created during the day.
All sectors are positive and action seems to be a bit higher in Auto. So that may be one place to look for long trades, if any, today.

Traders got squeezed yesterday in a rally trap. As mentioned in a post yesterday, the Bank Nifty seems weaker compared to the Nifty and its component stocks are also not doing very well on the charts. Hence if weakness shows, then we can expect more of a slide in the BN. The SGX in the morning is flat and hence positions may drive today's trends.
A telltale sign of bearish tilt to the sentiment is shown by the absence of any put addition to nearby strikes. Instead we find substantial call OI addition indicating that the market may be poising for some declines. 15500 is a big bone of contention right now and could see some standoff from both call and put players. Going by present evidence, put short holders will blink first. Their next line of defense is far away, at 14500 and then 14000. These may be plays for the monthly expiry, though, rather than the weekly expiry of today.
On Bank Nifty we see addition to 32500Pe in both weekly as well as monthly expiry so it seems bulls may attempt a stand there. Keep this as a stop on longs in BN.
In NF, a break of yesterday low at 15365 should be kept as a signal of further bearish intent. The last swing low near 15200 area may then be a level to look at. A break of 32700 would pave the way for more declines in the BNF.
Why am I speaking about lower levels only? Simple- at the moment, that is the one which creates more sentiment jolts than advances.

See the contribution by the heavyweight stocks on the Bank Nifty today. Going against them are two relatively small stocks in the BN and with the charts of the leaders still looking weak, it seems difficult for the BNF to stage big rallies for now.

The morning note indicated declines and the first indicated level for the Nifty future has been reached already. The targets in BNF have hit the first level but it took a while to break down and we may possibly see a move below the 32690 area mentioned as well. Nifty also opens up room till 15300 levels by the end of the day.
Those that shorted the mild rally of the morning would have gained. Kotak Bank is the lone rebel in the Bank index but that too is struggling. On the Nifty stocks, those that are in the plus are quite mild (@1% gain) while those that are down are deep into losses for the day (bet 2-5%). So, the bias ought to continue downward.
Those shorting calls can keep rolling down in the strike while those trading futures can await the next set of lower targets mentioned.
Among stocks, weakness in metals persists although pace is slow. More losses are expected in these names before the day ends. Reliance was mentioned as a weak stock and that is still beating down further. There seems to be some stray interest in buying Psu banks. But with market skidding, it seems pointless to indulge in Psu banks for today.

Yesterday people's hopes may have been raised by a rally in prices. But the weak open and continuation below has dashed any hoped of rally furtherance. Both indices broke their morning lows swiftly and set up the possibility for more declines. Bank Nifty is a tad weaker than the Nifty as at the start we had no stock from banking pack in the green and it now seems that BN may head towards the 32775-690 zone today. Lower levels for Nifty future would be 15365.
If anyone is caught on the wrong foot on longs in yesterday market, it is best to mark some stop levels and exit if those are lost. No point in fighting a trend purely on hopes.
From stocks, Reliance is showing some weakness and taht may impact the Nifty downward. Metal pack is down from the open and after a brief two session rally, prices seem to be resuming the decline. Aluminium and Copper shares seem more impacted.

For a while now the DXY has been into a strong bullish advance. From a low near 90 in May 2021, the prices have moved up steadily to 104-105 levels now. While there is still a pattern present in the long term charts for further bullishness in the Dollar, that would require some strong bullish action on the charts which can only occur through a series of events that may be deemed bullish for the greenback.
The geopolitical disturbances are no doubt creating enough uncertainty to keep the Dollar bulls going, we can find some hint of tiredness creeping in when we look at the daily charts or lower time frame charts. The last time we had a correction of sorts in the Dxy chart was back in Dec21 and since then, prices have been trending strongly.
Some dissipation in momentum is starting to manifest and in lower time frame charts, an inability to recover to higher levels is also visible. Together, these two developments may point to the possibility of a correction setting in.
Hence, dollar bulls should be on the alert now and protect long positions. Hedges may postponed for a while, checking the intent of the index in the immediate future.
The signals are tentative yet, as individual currency charts are yet to signal any changes (Euro, JPY etc). The INR has been sliding but the pace has died but unless prices can break below 77 levels, any strengthening in the INR may be difficult.
Nevertheless, the default status of strong US dollar for the last year is now under a small cloud. Whether this will grow into a larger cloud remains to be seen.

After hitting a recent high of 9632, prices of crude futures at the Mcx are down in the last week. This followed the decline in international prices owing to recession fear that may lead to demand destruction. So crude is being driven higher by the Ukraine war but at higher levels seeing selling on fear of demand receding.
While there may be conflicting factors impacting the price at this level, the 9% decline has brought prices down to the weekly chart support trendline, with most of the fall happening on Friday.
In my earlier long recommendation (around 8000), a trailing stop would certainly have been hit. The daily charts show that the main demand zone for the counter may be around the 8175 area and with global crude still on a slide, it is possible that we may see prices seek that lower support. Hence one should wait to see if there is more weakness before attempting to buy crude futures.

Many cryptos like Ethereum, Bitcoin, Binance, XRP, Cardano etc. etc have slid to some measured support zones using Fibonacci retracements and extensions. This may call for a halt (temporary or otherwise) for cryptos and come as a major relief for beleagured crypto traders.
If this support has to survive and create a rally, then it is necessary for recent lows in each of these names should hold. Coin traders may watch for that and if inclined to buy, should set their stop to below the recent lows.
It is to be understood that reaching a support zone does not automatically mean a rise will occur. It is just that the fall may halt. Consolidations at these levels will also be a signal that fall has abated. One can then track these charts using lower time frame charts (above supports were found on longer term charts) to spot signals of uptrends if any.

The Sovereign Gold bond sale is open till Jun24th. Min investment is 1 gram. For online purchases and payments the rate is 5041 (a discount to current gold prices around 5086 per gram). Those that like to invest in gold are better off using this route than to buy physical gold.
These are easier to store, can be used as collateral if necessary and you get 2.5% p.a. interest too. If you hold to redemption then any gains are tax free (bot not if you cash out in between).
Allotment shall happen by Jun28th.
Gold investors should go for it.

Opening slightly soft, market continues to drop, albeit slowly. Nifty made a slight lower low compared to Friday but not Bank Nifty. Yet. Since no strength has appeared and there is no particular newsflow too to encourage buying, the chosen approach should be to short Nifty below today morning low for targets of 15170/110. Rallies to 15320-330 area can also be shorted. Option traders can attempt shorting 15400Ce during rallies. Those that like to buy options can consider buying the 15200Pe once the rally turns around from near the expected resistance levels.
Bank Nifty is trading slightly better but is still in the red as yet. Expected rally was to around 32800-32900. Those wanting to short can attempt short 32900Ce. All option trades should have 25% of option value as stops.
Metals under pressure since the start of the day. Fresh breakdowns of supports seen in intra day charts. So more declines expected across the day. Consumption stocks seeing some slight buying, perhaps defensive. Retail action negative as both Mid and Smallcap indices well in the red today.
Market is leaning to the bearish side. Rallies may be from short covering or sporadic buying. Hence default approach as yet is to short on rallies into resistances for both indices and stocks today.

Bearish phases give us a chance to look at some of the winners of the bull market and one of them is Tanla. At the current levels near 1000 the stock has dropped 50% from its all time high. This can be a good place to look at some supports to emerge in the price zone of 975-1025 area and hence some phased investing can be considered. While its Trubloq platform is expected to continue growth, the newer Wisely platform (Vodafone and Truecaller business messaging) should help revenue growth and profitability in the near term. A favorable revenue mix in the future with higher contribution from better margin product business should improve the quality of earnings.

Cryptos were a good proxy for judging the risk-on sentiment. In the rise of 2020 onwards, crypto and the Dow had become quite correlated and for a short while (Jun-Noc21), cryptos out performed the Dow too. This triggered massive sentiments towards cryptos and newbies- particularly youngsters- took to crypto trading in a big way.
Since the Nov21 high, crypto prices have been sliding rapidly. BTC has lost over 60% while ETH and others have lost about 70% of their value. The market cap of cryptos has come down from a high 2.97 trillion to under 900 billion now! Huge losses have been inflicted not only investors and trader but also on Institutions and even Sovereigns!
It started with the China clampdown in Sep 2021, then India joined in a bit but major concerns with the US inflation and interest rate hikes, liquidity in the crypto systems started receding rapidly. This has led t a massive sell off.
The huge losses may prevent any immediate return of investors to the market and the badly hurt sentiments may keep risk-off approach patent for a while. Not good for equities worldwide either.

Throughout 2021, rise in equities were bolstered by Retail money flowing to the market- both directly and through MFs. One of the reasons for this was the very low rates being offered by FDs, which is one of the mainstays of retail investing.
Now with markets declining for the past 8 months, portfolios have eroded and invested money has got stuck. The willingness to invest more has been dropping steadily. Now a new element has got added to the mix. The RBI rates by 90bps and this is followed now by FD rates rising. Corporate deposits may probably start offering more in the coming days. This means there is now an alternative available at not-so-low rates and we may therefore see the more risk-averse money return to the FD environment. So one of the steady inflows into equites may start tapering off. Could be a factor to affect the recovery process of equity prices.

The initial strength which I commented on in my last post seems to have dissipated rather swiftly. Pharma losses deepened, Metals are giving up their gains and Indices have beaten a retreat from their gains. The strong breadth scenario has changed to 8: 18 (previous reading was 32:2) implying that much of the buying was short covering and seems to have completed. With no follow through buying coming in, the trends appear to be giving up for now. Some dullness ahead then for the next hour or so?

Market opened weak in contrast to flat signals at the Sgx. A swift drop that has now seen some clawing back. What is more interesting is that the breadth post open has shown some definite improvements. This implies some buying which could be in the nature of short covering. More positive good breadth compared to weak ones at 32:2- now that is a good ratio indicating a lack of selling for sure and some hint of buying too.
Nifty is up about 200 points from its low of the day but much to do before it can get out of the pit it has dug into. Bank Nifty also 500 up from the day's low so far. It seems like we may have seen the worst of the selling for the week yesterday. But no cause to rejoice. Like I said in the morning note, such deep oversold levels are for day traders and not for the others. The latter need to wait for more confirmed signals. Pharma, IT and Consumption are down so Nifty may find it tough to move higher. Metals are up so sentiment improvement is possible.

The Nifty fell headlong yesterday but the rise in OI was about 4.8% only. I would have expected a much bigger addition to the short OI than this. Perhaps the fact that the FIIs were already short to a significant degree (88%) may have something to do with it. So if they didnt really short the Nifty much then the only way the Nifty could have fallen this much is if the component stocks fell sharply.
Taking a look at the Nifty stocks I find that 46 stocks fell headlong, with most mimicking the pattern shown by the Nifty in the 30 min chart- not a single 30min candle was able to rally all through the day! Thus the cash selling was dominant and created the pressure.
Only four stocks managed to buck the trend and looks like there was buying in Nestle, Britannia, Asian Paints and Hind Lever- the usual gang where the funds choose to hide!
Is the selling qty over or there is more to come? On that shall depend the trend of today. With FIIs in such a heavy selling mood it is unlikely that the DIIs will come out shopping openly- for, they are getting enough goods from the FIIs anyway! So dont expect DIIs to come to the rescue- they are just slowing down the decline by absorbing a good chunk of what the FIIs are selling.

Bank Of England raises rates by 0.25% to an 11 year high of 1.25%, sees inflation hitting a peak of 11% in 2022.BOE is grappling with an inflation rate that has already hit a four-decade high of 9%, and concerns about an economic slowdown putting the UK at risk of recession.

World's second largest chlor-alkali, caustic soda player Westlake announces force majeure
Critical processing equipment failure leads to sudden chemical plant closure in US. Westlake plant to impact caustic soda, chlor-alkali availabilty
Global Caustic Soda, Chlor Alkali prices firm

Companies which Benefit if Caustic Soda, Chlor Alkali Prices Rise esp for exports

Tata Chemicals
Chemplast Sanmar
GHCL
Guj Alkali
Grasim

The price time window mentioned earlier seems to have been missed as the market showed no inclination to halt its decline of today. Now we are looking at 15442/15380/15320.

A price and time window is emerging for the Nifty around 15505 and 1.00pm. Lets see if this works to halt the decline.

Many would have been disappointed with the moves in the market this morning. Everyone was waiting for the market to bound upward and that expectations turned into a damp squib! In the sharp decline post open the Nifty has come down to close the morning gap. Can it rally up from here? it can. Had set a stop in the morning of 15700 on a closing basis and the low so far is 15706. Keep 15685 as the final cut off if you dont wish to wait for a on close stop loss.
For Nifty to rebuild, it has now to progress past 17785 first and then haul itself towards the day's high. Lets await this.
Bank Nifty had mentioned that it had a slight edge over the Nifty in the morning. In the decline , it did not come down as far as the morning gap level, suggesting that buyers are a bit more determined here than Nifty. So perhaps we should be looking at the Bank Nifty trends today to signal us Nifty trends as the latter may follow. Above 33560, matters may start turning better for BN.

Opens up as expected. Bank Nifty doing much better compared to Nifty. Possibly may be do with short covering in banking stocks. Big advance (relatively) is seen in Mid and Smallcap indices. So retail is to the fore then. All sectors in the green. So braedth is wide and positive. Btst trades have been cashed out postopen so breadth has slipped some. No big gainers or losers so far, which means that people dont want to buy into a gap up move even if they feel that the worst may be over. Gainer stocks for the day seem to be mostly those that have taken a big hit recently.
So, nothing gung-ho as yet. We should be seeing some real movements maybe about an hour into the day or so. By then the dust of short covering and new views etc shall settle and some more pointed signals may emerge.

Tech stocks were bashed in in the last 6 days, dropping with sharp gaps on three occasions. The wind certainly taken out of their sales. Now with the main Fed event over and Powell having already prepped the market sentiment with another possible 75bps in July, there should be a rally in the markets. Will that produce a rise in Nasdaq? Prices are down to the 200ema on weekly charts. This average has been good for providing support to large declines in the past. So, that should be anticipated.
It can translate into some upward price action in our tech stocks too? Since they are well denuded as well, we should anticipate those too.

And so, the cat is out. 75bps is in line with expectations, although many hoped for some sentiment reprieve with a 50bps. But now that the event is over, market will simply move on. Or at least it should. Particularly our markets. We have been enough hung up on US markets for quite a while now. It is not as though the FIIs are going to double their sales just because of this rate hike! They have already done some 50bn sales which is still some 5% of their holdings I think. So expecting that they might be done is not quite correct. By now, FII sales have become a kind of 'default' setting for the daily data. We all get surprised when a positive figure gets reported. Thankfully, our domestic funds have been reasonably up to the task. The slide is because the retail money hasnt been coming in at the same pace. With portfolios denuded by 30-40%, willingness has taken a beat. MOney is there, but the spirit is missing.

sgx shows a nice positive, with the Nifty reading above 15800. That is required for making a go for it today. We all read reports of how the FII position in Nifty was high on shorts. Covering would definitely keep the Nifty ticking higher. The support at 15650 held, on intra day charts three higher bottoms formed and as Gann has said, speedy moves emerge out of the third or fourth higher bottom. Today the market has been given the reason for a rise. Short covering possibilities shall make it a speedy one.
How far up do we get to go? The gap target is first, at 16200. Next would be 16470 and 16680. Play multi day long for that. Stops for this trade would be 15700 on closing basis.

The govt achieved what it wanted- reduce steel prices sharply locally. This was the objective of the slap of export duty a few weeks ago. This 20% fall is the steepest that domestic steel prices have witnessed in the past 6 months.
Alongside, HRC prices are down 18% Rebar was down 15% ad Wirerods were down 15%. The market has turned and buyers are waiting for fuurther drop in prices to place orders. Monsoon setting in is a seasonal dampener for prices anyway as construction activity ebbs. Iron ore prices are currently about 24% down already and expected to fall further as global prices of ore slide on apprehensions of Shanghai facing anoute round of mass covid testing this weekend. New variants have been discovered in China and hence any relaxation there is unlikely.

Metal stock prices are sharply down. I have been writing on this for the past few weeks. Lower prices should not lure in any buying. Instead, rallies should be used to sell into. The cycle remains down for now.

UNCERTAINTY IS THE VILLAIN
The Sgx continues to remain down this morning, indicating a further dip possibiliity. The main reasons for yesterday's steep fall is all emerging from the US- inflation spikes, possible aggressive rate hikes by the Fed and a spike in the US Bond yields (which signal market's disbelief that the inflation may cool). In addition there are worries of China's covid lockdown as well as the geopolitical scenario.
The late day rally from the March low areas (almost 120 points) was perhaps owing to some news that some negotiated end may occur to the Ukraine war. However, sanctions on Russia are expected remain and if that sends oil prices higher- as they are expected to- then inflation worries shall continue.
The UsdInr pair lost more ground (to 7803) as the Dollar index gained (this was mentioned in yesterday post), making the FPI selling a continuing affair.

Lets look at the flip side. Our GSec yields jumped to 7.6% for the 10y but the RBI has said that inflation will cool by the fourth quarter. Earnings were decent in recent quarter- Nifty EPS move up by about 20%. Stocks have already declined by 40-50%. This is the 8th month of decline. The daily chart RSI has dropped to 35. Pessimism has set in.
These are all structures that can support a rally to form. The first turn date for the Nifty for June is set for today. Yesterday we had a very small break of the March low and then a brisk rally. When this kind of move happens, it signals a larger hand at work- one which breaks prior lows, runs out all the stops to collect goods at lower levels and then head higher.
Given that this happened around a turn date may create a higher bottom attempt today so that is the first thing to watch. If yesterday low is not broken and today top is taken out, then play for a rally.

The charts indicate two turning dates for June- June 14 and then June 28th.
We are down into a former support zone near 15700 and the first turn date is approached. So we should look for any sign of that low holding. But if it were to give way then the next time cycle low is about a fortnight away and then we may have to plan our approach differently.
Given the proximity to the first turn date, it is better to be on a watchful mode with relevant levels defined to gauge market intention.

A weak open was expected. In my earlier post I had indicated that the Mar/May lows will come in for a retest but I certainly did not expect that it would happen within the first 30 minutes of the day!
Much of the pending shorts would have been covered. No one is going to look such a good gift horse in the mouth! And, the market is not coming up. So, that means no additional buying of any kind emerged alongwith. This is bad news.
Inflation has become public enemy No. 1- both locally and , particularly, in the US. We have no local issues right now and even in the inflation area the news flow is alternating........the IIP nos came in ahead of expectation and the GST collections continue to be good etc. So, it is really the high focus on US inflation and what it means for global fund flow that is creating the current furore.
But the real fact is that a down trend is in progress and that has some legs to run before it tires out. I have discussed this in my different postings here and elsewhere. We all like to have " reasons" for every squiggle that the market makes. The TV ensures it. Whatsapp revels in it. Telegram makes a business out of it. None of which help build clarity. They all (meaning TV, WA and TG) have their uses but clarity should be in our minds. A 1000 point rally occurred from the May low of 15700 to 16800 high in June. Such rallies will be there even ahead. But until the decline runs out and shows us through a pattern formation, we have to consider the main trend to be down.
No point in writing anything for the day. The damage is big (average 4% in many names) and normal volatility ranges will create rallies and renewed dips that will be difficult to take advantage of. Not advocating fresh investments here even if you are sitting on cash. Patience required.

The Hdfc and Icici Group stocks have been among the most popular and widely followed stocks in the market. There was a time when the Hdfc stocks dominated and had a healthy multiple on the Icici group stocks. But over the recent months, that seems to have changed a bit.
Particularly, the valuation gap between the banks seems to have caught up and today Icici bank trends appear to be more resilient compared to that of Hdfc bank.
In the attached chart, we can note the similarities between the similar stocks of the group. Icici doesn’t have a housing finance but with the merger announced of Hdfc and Hdfc Bank there would be one stock less. We can note that the Life insurance business seems to be having some takers as the recent trends in both Hdfc Life and Icici Pru have been moving up in a similar fashion.
The market related stocks- Hdfc AMC and Icici Securities are biting the dust since a while and clear exits are seen in both. The general insurance business doesn’t seem to have takers for Icici Lombard.
Hdfc Bank is trying to stem the decline but Icici Bank already seems to be ahead in the race among the banking pack.
Right now, in the market, Icici Bank and Icici Prulife seem to have the edge on their Hdfc counterparts. The other two stocks are struggling for both groups.

Writing back in May 22nd, I mentioned that the Dollar index is poised for some moves. The index, over the last couple of sessions has clearly hinted that it wants to move higher. The last two sessions have shown some acceleration and we may see some further gains made by the Dollar this week.
This is important because a strong Dollar is going to pressure the Nifty lower gradually. SGX is threatening the 16000 levels and a break of that would puncture the sentiment further. If this goes lower, then the Mar/May low around the 15700 is coming up for a retest.

Market opened with a wide gap on the back of negative advises from overseas markets. There has been a small attempt to stem the decline but the buying appears to be mostly of short covering nature and once that is completed, the trends can resume their decline. All sectors are in the red with Bank Nifty leading. IT tried to rally a bit but that seems to have fizzled out and trends are taking a hit again. Metals seem to be resuming their slide.
The Breadth overall seems neutral with gainers and losers matched post open. But that is not telling the real story. In my software Neotrader, one of the key elements that I have built in is to be able to read the market status using any indicator. And looking at the markets from a trends perspective (rther than just a closing price basis), I find an extended negative breadth today. It will take quite some effort for the players to reverse this during the day so we should be looking for continued declines. The Nifty stopped at the first level of support but the bounce from there has been limited. So if 16250 is now lost, we can see a slide towards 16160-16100 levels. Similarly a break of 34615 in the Bank Nifty can see a slide towards 34525-435 area.

Although market has opened soft and values traded down, there has been some attempt at recovery. The breadth has improved nicely post open. Neotrader breadth readings from last close and today open are shown in the chart.
(Click on the Title to view Chart)

It can be noted that there is sharp increase in the gainers post open. It is therefore evident that lower levels of the morning have been used to cover shorts or buy in. If this persists then we may see a better day.
Nifty moving past 16340 and holding above will be a positive. Similarly Bank Nifty needs to be above 34900 for bullishness in bank sector to evolve.

We have had two updates on Crude oil so far. First was on 30May when I flashed a buy on a breakout of the 8700 area with a target of 9350 and then followed it up with a second report on 5June sugesting continuation of the long. Todya prices are trading at the suggested level but with no signs of any fatigue or profit taking.
Fundamental factors are driving crude prices right now. While Europe and US sanctions may see a shift away from Russian oil, there is a surge in Asian buying of the same. One of the tricky eleents coming into place is the ban on insurance of Russian oil supply that may force Russia to give even higher discounts (currently around 30%). It is also debatable whether Asia would be able to absorb all of Russia production. If not there may be a drop in the overall supply that may keep prices elevated. it is not known how much the OPEC+ countries can ramp up production to meet Europe demand.
Also, prices may continue to remain firm as shipping costs from the Gulf region to Europpe and US may make crude costlier. Asia has been relying on Gulf crude for long and India buys big from Iran where too US sanctions exist.
Everything points to crude prices continue to remaining high as supply shrinkage, increased costs of transport etc will continue to get priced in.
Hold long with a revised stop at 9000.

Here is an interesting chart (source: Zerohedge) which shows a comparison of Fed QE activity and the move of the S&P. Through the past many dips, the Fed QE program has been instrumental in staving the decline and pushing markets higher.
This seems to have worked until recently. With US inflation rising sharply to multi decade highs above 8%, the Fed has decided to downside its balance sheet and seems serious about it. If the taper program is to play out, investors may find that the comfort of a savior may no longer be there! What then?
Diversifying into US stocks became a fad during the last year. It may be time to revisit that strategy perhaps.

This is the status of stock price losses in the Nse500 list. AS can be noted, a very large percentage of stocks lie in the >20% bracket. Compared to the 10-15% loss in the Nifty so far, the stock losses are much larger. So the correction has certainly eroded portfolio wealth of people and hence the sentiment has been subdued.
It will require a good repair to this state of affairs before we can start thinking of new highs in the market.

Yesterday I highlighted some newsflow and market chatter regarding TV 18 Broadcast. Nice to see the stock up by over 5% today. Should head out towards 49 levels at the minimum I feel!

Today the SGX is reading positive and hence a flat to better open can be expected. This constant down-up sequence has been in progress for sometime and has been causing a great deal of difficulty for traders who engage in Btst trades. It is also keeping us from forming a steady view, thus making trading even more difficult.
At such times it is quite tough to create consistency of results in your trading. The best you can do, in my opinion, is to keep the losses small. Cannot really cut down on frequency much because it is difficult to tell as to which of the signals will turn into a winner. So, we have to make a series of probes but do that with small positions.
Indices are also not coming through much in day trades. The Nifty ATR value, for eg, has dropped from around 70-80 to around 45-50 levels now (intraday). This means a sharp drop in the range potential, making directional trades quite difficult to achieve success. Can shorting options work? It would have, as the range dropped. But with range now down to 40-50 points, there is a danger of some IV spikes so maybe not just now.
Event scheduled for today is RBI meet. Market is already pricing in 40-50bps of rate hike. Anything lesser will turn into a positive. If the hike is as expected, the fall may not be much as it is much in the prices already. Better to wait for this event to get over and then trade, so as not to get trapped into some localised volatility spikes during the day.

This table shows the impact of FII selling over the years from 2008 onwards. it is an interesting compilation by someone and shows that despite the outflow being the highest in quantum, it has ahd only a limited impact on the returns. In 2008-9 we saw an impact of 57% for a 15bn outflow and then 23% in Covid onset for a 9 bn outflow. But now 28bn out and just 9% down?? Note also that the outflows were 4.2% of FII holdings. Only larger was in 2009!
Seems like FII money just doesnt have the same kind of bite anymore during dips!

1. Ipl auction in June
2. July quartly result
3.Amir Khan movie lal singh chaddha
4.Sept Oct The biggest sports in world is fifa world cup. telecast rights owned by viacom18
5. 13200cr investment done various investors in vaicom18 may get clearance in nov dec

Chart shows the stock has dropped 50% from high of 80 to a low near 35. The last rise has been almost completely wiped out. Hence if one is buying the stops are very near (below 35). Cmp is 40.

SGx is trading down pre market. After a 5-day consolidation, if the index decides to resolve downward, that would not be good news. Nifty will need to cross 16640 to get back into upward action and even though that is not too far, the bulls don’t seem capable right now to achieve it. There is talk of 50bps rate hike coming at the next RBI meet. Since the talk is there already, one can consider that a good bit of it is already priced in. But you never know till the event. Govt is also taking several steps alongside to ensure that inflation remains under control (oil deal with Russia, hike in steel export duty etc. etc.) so it is important to watch the RBI governor’s address to get a feel of how matters will go along. The enhanced import bill (even as exports surged well) has already been mentioned as a matter of concern by the RBI.
Given all that, one needs to watch the lower ends of support to see how the market holds up. Progressively, these are 16385/16250/16130. Declines, if not volume led, can be expected to contain at these levels. So that is the immediate event to watch ahead.
Bank Nifty is also not holding up well and if 35100 is lost then there may be a further slide. This index needs to move above 36100 to become robust again.

Russia Ukrainian war at near end. Restricted to border area only.
50 embassies start operations in Ukrainian capital

Oil capacities increasing around the world. See crude at 70-75 dollars in three months.
World dependency on crude decreasing.

Losses in china and Russia forcing fii to sell in india and other mkts to par losses.
India corrected 10% and very healthy valuations at present.

Uncertain china and Europe future should get fii back in india soon. India looks safest to invest.
India continues to spend on infra which is a big positive.

Rural income at highest in many years. Leading to spending again.

India’s 70% population has occupation and hence more earning members in family to lead to healthy spending and saving habits.

It took india 60 years, from 1947-2007 to reach 1 trillion economy.. from 2007-2015 it reached 2 trillion.. currently india is a 3 trillion economy…. India should get to 6 trillion in 7-8 years. Massive earning opportunity to make wealth in next 7-8 years for all Indians.

Like metals, IT, banking and pharma with 4-5 years visibility.

Hydrogen based fuel should be a revolution.

Trends in Aarti Ind were appearing weak and there may be softness ahead for the stock in the week ahead. Prices broke below the 50% retracement of the recent upward swing.
Using the CPR settings from my NEOTRADER software, I find that the weakness is across time frames, not just the daily charts. As can be noted, stock has negative CPR score in all time frames and prices have slipped below the bottom channel of the Cpr too. It would be easy to break the last period lows as well if some weakness manifests this week.
Can look for short trades in this one. Using Neotrader’s many features, it would be easy to pick such multi-timeframe trend weakness (or strengths) for more efficient trading.

We have the Sgx showing some negative and Dow futures too was subdued. If that remains the case tomorrow morning then we may see a softer open for both indices. The option build is not happy for bulls because we see the Bank Nifty drop in price with a rise in the OI from 24L to 27L contracts. Similar situation seems to be found for Nifty too as the cumulative open interest has dropped to 118L contracts from 128L contracts earlier. But here the futures had rallied so one can possibly conclude that the rise has been used to exit pending longs. The PCR too has dropped to around 0.75. If positive news flow or order flows do not emerge early in the week, we may see some initial softness that can push prices towards 16150 area.

As a follow up to the last week’s bullish view on Crude, the moves continue to aver bullish intent as price are overcoming the median line of two pitchforks (longer term Schiff and shorter term Original pitchforks). Dips back to near 9000-9100 may continue to offer buying opportunities. This is being seen despite OPEC+ decision to up the output by about 200K barrels per day. We saw some near 4% gain during the last week and when price trends buck the news, it signals the sentiment bias.

Steel companies have deleveraged significantly from an average net ¬debt/Ebidta of 4.8 times on Mar2020 to 0.9x on March¬2022. While the quantum of debt is lower the increasing cost of debt and lower spread from operations can lead to interest costs taking 15¬-18% of EBITDA compared to 10% earlier. Tata steel with highest spreads is better placed amongst the lot to maintain interest costs at 89% of EBITDA. SAIL and Jindal Steel targets to be debt free by FY23 may be complicated by decreasing spreads.
On the other hand, capex plans are at a higher level and few companies have reiterated the plans even after import duty announcement and lower spread outlook. China’s lower participation in steel exports may have encouraged such positioning. SAIL, JSW Steel and Tata Steel have budgeted between 8,000 crore and 20,000 crore for capex in the next year alone with a significant increase in output by 15-¬20%. Considering the volatile environment, Jindal Steel with spread out investment schedule over three years (18,500 crore) may be better placed amongst the four. If the spreads continue to decline, companies may have to step off the gas on capex.
The relative performance chart of the four majors shows Tata Steel doing better with Jspl meeting with pressure. Longs in the latter may be switched to Tata Steel or a pair trade can be considered.

Much interest was evoked by the giant IPO of LIC. But it seems to have become a damp squib as far as the market debut is concerned (down by 13% from listing high). The recent results of all the life insurance stocks were pretty decent but none of the stock prices seem to have been impacted positively. It could be that the market is weighting down the stocks because the life cover aspect in most of them are pretty low (around 20-25%). The share of protection plans for Indian players lags established markets such as China, the UK and the US. On a combined basis, it is less than 20% for the top four private players, while globally the number is 40-¬45%. With listed stocks trading at 2-3x the FY23 embedded value, valuation premium for the sector has reduced significantly.
In a rising interest rate regime, the big reliance on savings component of most schemes of these companies – which provided the kicker for better results of late- may become uninteresting. Bigger portfolios must have an exposure to Insurance stocks as this is a vastly under penetrated segment. Given that, SBI Life seems to be the best bet among the top four based on the relative performance chart shown here. Investors may consider switching to SBI Life from the other names.

Markets have opened and trading better since the open. IT leads from the front and is helping the Nifty do better compared to the BNifty. The latter has shown a larger range this morning and if it drops below 35800 levels then we may see further weakness in Banks. On the other hand, if NF manages to now notch up new day highs above 16790, then we can see an attempt towards 16900-950 levels too. That was the target zone mentioned in the note I had put up a week ago when the range breaekout had occurred earlier. If banks can overcome the weakness, then this job may be more easily achieved. But at the moment the IT majors are more than doing their bit along with Reliance that is chipping in as well. The metal pack, where the view was bearish, continues to remain subdued and possibly fresh weakness may show only after the index rally completes.
Among top gainers for the day there are many IT names and that implies continued buying in progress in the sector. Intellect, Mindtree, Tcs etc had been singled out for focus and those are seen doing pretty well so far.
Seems to be some decent action in MCX this morning. Stock had signaled bullish intent a fortnight ago and this seems like follow through price action. Longs can be considered here and on dips as well. ABFRL is showing some willingness to move higher and one may want to take a look at that one.
All cement stocks are marked down, and that too sharply. Didnt read anything in the papers so it must be some sector based new that has come out later. since some sharp fall has occurred already this morning, it would be better to look for shorts during some intra day rally only.

My earlier note on the subject mentioned that we should see more gains in IT names and today too we are seeing IT stocks doing well. TCS is performing the best relative to the others and hence traders can single it out for a buy. Coforge is the other one seen doing well too. Intellect is the other one worth noting here. Surprisingly, Infy, despite having some newsflow as a tailwind is seen struggling a bit. Perhaps people were already long on anticipation of good commentary from the management and profit taking may be on.

In yesterday’s market we saw IT stocks rally by some 3-4%. Checking the Nasdaq index, we find that the decline reached a measured support (AB=CD) at the recent low. This is shown in the attached chart. Since this level was also the 50% retracement of the rise from 2020 low, making the bottom possibly a little more durable. This seems to have led to the rally seen yesterday. It is quite likely that the rally may extend further. The Nasdaq composite could pull back all the way to 14200 levels if triggers persist.
Fears of US recession were mainly driving IT stocks lower. With IT stocks falling 30-35% from their highs, a feeling of oversold or value had emerged.
Most of the stocks have retraced to around 38% of their rise from 2020 low while a few have done even 50% (Coforge, TechM) while LTI has done 62% too. So most stocks appear to be at support value zone and hence long positions could be attempted.

Nice set up seen in multiple time frames on Crude oil charts would indicate a rise in the offing. Tightness in the global crude supply pushed the prices up last week. MCX crude saw prices climb 3% for the week and seem set to continue.
Continued US sanctions coupled with the summer season in US are likely to continue the tightness in the market.
A range breakout above 8700 levels has occurred this may create a drive towards 9350 levels ahead. Longs can be considered with a stop below 8450.

In an earlier post I had mentioned that there would be continued weakness in Steel and allied metal stocks. We witnessed continued falls and now the prices are flat for the past couple of sessions. The view on these stocks remains unchanged. Any rally will lead to more supplies. As expected, more brokerage downgrades have come in.
Domestic demand needs to increase sharply to offset expected lower prices. But that may take a while because of rising interest rates and inflation.These factors can also hinder capex plans of steel players (who have actually been on a capex drive). Use rallies to short.

Having declined down into support zones, it seems like Fertiliser stock may rally and can be looked at. Gnfc is already up and Chambal saw large new OI build. If prices improve, can take a look at these two. Deepak Fert has been on the move already.

For the past couple of sessions BN has been doing much better than NF and this situation may persist in this week too. The OI build up is steady and Friday saw a large build in Fin Nifty futures too. Momentum is up since 20th and holding.
If Nifty breakout is successful, BN could make a run for 37100. Dips to 34800, if seen, remain buying opportunities.

The Nifty has been moving in a range for the past couple of weeks. The SGX at 16435 at the time of writing this note, is trading at the top end of the recent range. Will it find enough ammo to breakthrough? We will know tomorrow. If the breakout is successful, then we can see a run to 16950 areas. Something to look forward to in the next week?
The MaxPain in option at 16400 so crossing of the level will propel prices higher. Needs to negotiate the 200dma at 16750 along the way. The call shorts are piled near 17000 and may not be shaken so easily so that will probably be the max extent of a rally if it were to ensue now.

The major resistance for May is around 16400 and with no signs that this is going to be taken out, it seems that we are going to end the May expiry a bit tame. This level will continue to be of main influence in the June contract as well and hence bulls can only start moving after the market makes an effort to take this out.
Lower levels remain open until then. The turn date for May was expected around the 23-24 window but so far nothing has come of it. Even in case of a turn, June doesn't hold out for being anyway bullish in the sense that we would like it to be. Hence we may continue to look at desultory trends for a while, driven by localized news flow. Thus volatility in a low range with an overall sell-on-rally bias needs to be maintained until further evidence shows up.

The govt's sudden and completely unexpected decision to raise the export duty on Steel to 50% has dealt a body blow to steel stocks yesterday. The major steel names Jspl, Jsw and Tisco did not recover even by the end of the day.
This development is serious as govt seems to have taken the decision with the domestic market in mind and to bring down the prices locally so as to battle inflation. Whether these ends will be achieved or not is to be seen but the body blow dealt to steel and other metal stocks is going to extend some more.
I reckon there may be as much as a further drop of about 10% in the Metal index and that can easily translate into a further 10-20% fall in stock prices. Brokerages are already into downgrade mode and this will accelerate in coming days. Buying will recede and that will create additional pressure on the stock prices. Other metal stocks may fall in sympathy so longs can be avoided in those as well.
Those holding long in futures should liquidate at current as well as on rallies. They may be at a loss, perhaps large ones at that. But that is a bullet to bite, as of now.

Commenting on the charts of both of these stocks I had opined that bullish trends may prevail. Paytm wobbled a bit because of the results but righted itself quickly and moved past 600 levels, signalling intent to continue higher. This was mentioned in the follow up post on the stock made on 23May. EaseMyTrip has been in good form and is punching up into new highs.
Both stocks continue to remain holds.

The Rupee and the Nifty are directly correlated. When the Rupee weakens, the market takes a dive. This has happened recently too. The Dollar index DXY made a bottom around Jun 21 and started rising from around Sep 21. Our markets topped in Oct 21 and have been falling since.
The chart of DXY shows the possibility of the Schiff pitchfork breaking upward. Prices have reached the top channel and are seen consolidating there. But the Rsi is in fine form (see chart) and suggests that the move may not be over for Dollar strength. So at best, there may be a bit of a pullback for a while. Even in the weekly chart the Rsi readings are spiffy. It is only in the daily chart that one sees some momentum weakness. This may prompt some pullbacks that may create a relief rally in equities.
I have already discussed in a separate post (see Risk off) that I am only expecting a rally in equities and not a reversal back to bullish. The situation in Dxy only reaffirms that view.

From a comparative chart of Gold, Crude and Bitcoin it still appears that traders across the globe are not willing to play the risk on game. In fact trends are still leaning towards the risk off assets like Gold while continued bullishness in Crude chart suggests that the fear over the war in Ukraine is not receded yet.
This can translate into limited rallies only for equity markets, at best.

Looking at the relative performance chart, it is evident that Kotak Bank seems to have recovered rather well from its lows followed by Icici Bank (making a higher bottom in the process). These two appear to be technically well poised for any investments planned ahead in the banking sector.

Two charts were featured recently on banking business and both are suggesting some positive situation.

NPAs which were the bane of bank results a few quarters owing to the particularly lax lending policies now seem to be a receding illness. At the same time every bank’s ROA (whether private or Psu) seems to be on the mend. This has led to some improvement in banking stock prices. But then most have now stalled. So could it be that these triggers have run out of steam?
Looking at current situation, it is seen that Retail loans (leaning on unsecured loans) is the main driver and this is rate sensitive area. If the recent hike in rates, with more to be expected ahead (as much as 75bps on hears!) are any indication, then there is a big question mark on this retail led growth.
Gross non­performing assets ratio is a function of growth. Therefore, a combination of lower­than­anticipated growth and higher slippages from the retail segment could be lethal to absorb, feels an expert on banking matters.
Helped by lower provisioning costs, profitability has improved multi ¬fold for banks. In fact, the rally from March 2020 to October 2021 was aided by earnings improvement backed by lower provisioning. However, quality of earnings hasn’t improved and this is worrisome.
There is clear distinction in earnings between the large pvt banks and the smaller ones. Larger banks may have more room to curtail their provisioning cost and this may aid their bottom line in the future. So it seems that it would be better to opt for the larger banks compared to the smaller ones (like Bandhan, RBL etc.)

As a layman, it is difficult to read the Paytm results. Does one go with the loss reported? This was higher than a year ago and almost similar to the last quarter. For 2021-22, the total loss is some 2396 cr, a figure that can make anyone's blood vessels congeal with fright.
But markets are different. It all depends on what is factored in already and what metric it wants to focus on. So, instead of focusing on the loss (probably already expected and factored to some extent), will the market chose to focus on the robust revenue growth -89% in the last quarter? Or perhaps the 210% growth in contribution profit (I haven't a clue what contributory means- hearing it for the first time) for the quarter? Or maybe, it will want to shine the light on the loan distribution business (up 478%)?
The simple answer shall be given by the market. The low so far is 510. If that holds till the end of the day or prices move higher past 600 (minor swing high after the bottom), then the focus is on the positives. Anyway who gives a damn what the people want to focus on? We want to know what we should do in either case. For that the levels mentioned can be used as a guide. Current longs should have a stop at 509 on a closing basis.

Market has been a real yo-yo this week. Up strong on Tuesdayh and lost all of it by Thursday and now a rally again today. For the record the index may be 300 up or down. But in real terms, i.e. being able to take advantage of these big moves up and down, it has been a nightmare. Longs left open on Tuesday or Wed got chopped out on Thursday. Shorts created on Thursday were sliced to death on Friday! Mondat 230 up, Tues 180 down, Wednesday 560 up, Thurs 570 dn and now today 400 up already! We started the week at 15850 levels and if we finish lower today there, then all these moves would have been to naught!
Searching for sector plays in such times is foolishness but I see it happening all the time. Everyone talks about which sector is going to move next- as though they are some Institution who is going to allocate funds. Get real. As traders most people live and die but what moves on the day or a few days. Leave this sector stuff to those with mega bucks- it is their field. Traders should worry about whether the stocks they hold long or short is going to survive the trend of the day or not! As of now, even that is proving to be difficult!
Best approach for now- keep it confined for the day, take profits wwhen you see some.

A massive drop in the Dow (largest since 2020), caused the Sgx to crater badly and we have a gap down start. This is a problem for our market because the last two sessions were nicely up and a lot fo shorts got squeezed out. Thus the market would be without the cushion of short covering action today.
One of the factors to track today would be Dow futures and see whether that shows any recovery during the day. Our markets are devoid of any specific triggers and hence it will follow what the Dow does. The other would be the UsdInr trends because any weakening of the Rupee will further exacerbate the decline from here.
Question is, how much further down? Well, the 15700-750 area has proved to be resolute so far in defending the declines so far. Hence that may be the first port of call. That lack of rallies since the start of the day clearly indicates that no bottom fishing is happening and that there may be trapped longs still in the system. So expectations are that the market may fall further towards those lower support zones across the balance of the day.
Hence any adventurous buying should be avoided. New shorts can be done in stocks that have been down and after a consolidation in the morning are seeing some fresh breaks downward.

The chart of Cnx Metal index shows a remarkable willingness to find support near the main trendline. It has done so with the most current decline as well. Interesting to note that this trendline has been in force since May 2021 so that is a year of effective support now.
Evidently, the market is not willing to give up on the scope for metal stocks. The last two legs have been the largest in extent. So a big rise has been followed by an equally large fall and still the support has held. Seems a well-defined stop is available for long positions if built or held.

(Click here to view Image)

Bears have slammed Hindalco down very sharply over the last month or so, dropping the prices from around 625 to 390 levels now. There wasn’t even a minor rally that allowed holders to exit their longs. With Copper futures getting pummelled badly, Hindalco eked out a similar decline. Base metal prices have been sliding sharply owing to China lockdown. But the pace of decline may now ease off as mine supplies from Peru and Chile are expected to normalise now.
Chart shows Hindalco prices having slid much further compared to price fall in Copper (blue) and Aluminium (Cyan). Deep oversold levels reached. May be time for some rallies now perhaps.

Among the recently listed stocks EasemyTrip has been a good survivor, having weathered all market pressures to continue higher. It is among the stocks that posted a high only by April while most others had wilted around Sep-Oct 21. The recent correction in the price has been on low volumes and the Rsi had no divergence at the April high. Now, on daily, the Rsi has pulled back to near 40, implying some possible completion of the correction. On the weekly too the Rsi has come down to take support at the 60 levels. Seems worth having a look in these beaten down times. Cmp 376.

Recent news of Adani buying Holcim stake and entering the Cement business was a big one. A comparative chart of 4 top stocks (Acc, Ambuja, Ultracem and Shree Cem) shows that while Shree Cem was top dog but peaked early in Apr21. By Nov21, Ambuja and ACC had rallied swiftly to take pole position. This has been maintained into the present and post the news, both Ultracem and Shree have been sliding. Seems like switchover buying is happening into the Acc-Ambuja pair. Perhaps market reckons that with Adani backing it stocks may do better? I would stick with ACC in cement ahead.

Every quarter we go through about 30-40 days of quarterly results declarations. The big names are announced and analysed by TV channels who many times, even invite the management to share their thoughts and commentary. Below the big names, it then (mostly) comes down to which management is willing to spend some money on channel advertising and sponsorships to either have a brief chat (in the middle of the day, seldom in the morning or at the closing) or have their earnings flashed on the screen. But this is just a small number. For the rest of the names one has to rely on .......

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Market did not fulfill the bullish expectations held out over the weekend (on higher Sgx) and opened flat to better. At lower levels of the morning, buying has emerged and hence it seems like there will be an attempt to reach 16k levels. Post open breadth is still holding slight positive and all indices and sectors are in the green so far. Adani news in Cements has impacted a few positively but also taking a toll on the larger cement names like Shree and Ultracem. Bank Nifty tradign slightly better than Nifty today since open. Sentiment may be helped by the fact that Metals, Realty, Pvt banks etc are trading in the green.
Escorts is showing a 6-day high breakout so can be followed for a buy-dip strategy during the day. Berger paint shows a 10-day low breakdown and can be tracked for shorts.
Nifty resistances higher are 15960/16020/16085. Buying point for Nifty during dips is at 15800 and 15760.

It is not just the US 10y yields that have been making waves. The Indian counterpart too has been striding strongly over the past few months, improving from 5.74% in July 2020 to 7.49% in May 2022. The chart reveals that an Ascending triangle type pattern was formed near the lows, lasting from Jun20 till Sep 21 when there was a breakout in the pattern. Speedier moves occurred from thereon.
While the US is now looking to unwind its bloated balance sheet by stopping the buyback of bonds, something similar is also happening in Indian shores. RBI, too, is pulling back the ₹ 12­lakh crore excess liquidity it pumped into markets during Covid, with plans to reduce it to less than ₹ 2 lakh crore.
This is having a steady impact on liquidity. Vanishing liquidity hurts riskier assets more. This why the investor fancy for loss¬making new ¬age companies wane and new¬ fangled assets like cryptos and NFTs are taking a hit too. Going forward, as liquidity dries up and newbie retail investors retreat from losses, small-cap stocks may suffer disproportionate price damage compared to large or mid¬caps. Also rising interest rates (started with the recent hike by the RBI as well as the Fed) will now see a rebalancing from mostly-equity to equity plus debt.
Those that are heavily invested into small and midcap Funds should consider reallocations. Adventurous betting on less known stocks should definitely stop as those are part of bull market plays. I say this because most retail participants are caught in this web of get-rich-quick using such stocks.

The attached picture shows the contribuation of the varoious stocks in the decline of the index since Oct 2021 top. it can be seen that the three Hdfc group stocks (Hdfc, Hdfc Bank and Hdfc Life) each contributed about 21-22% in the fall. Hindalco, BPCL , Bajaj Finserv, Wipr, Tata Motors and IndusInd Bank have been the highest contributors during the fall. Among the stocks that actually contributed positive gains to the index during the fall include two pharma names (Cipla sn Sun Phar) along with UPL. But it is a totally unsung item like Powergrid that has been a complete contrarian with a 15% plus contribution! Maybe one should take a look there to see what made it so.

After two months of steady rise, the chart of the US10yr yield shows a break of the support trendline. From the March low (1.69%), there were three drives upward on daily charts. Each of the drive became smaller than the earlier one, showing diminishing momentum. Now a trendline break may suggest some pullback to either 2.7 to 2.56%. That may come as a relief to equity markets there and subsequently here too perhaps.

Bereft of any fundamental or technical arguments for advising clients, brokers have now turned to Astrology. In a note, it states," Mercury going retrograde from today. Sun and Rahu conjunction coming to an end on May 12th. Markets will bottom out today and rally for 6 weeks" Very helpfully, it adds that we should " do our own due diligence".
I am left scratching my head here. What do I do? Bring out a telescope to find out where Rahu and Mercury are in the sky and study their progress? Or may be look for some other planetary combines? How can any one do due diligence on things they don't even know??? Sometimes the stupidity of these people is unbelievable!
Instead if they had said something like, " We have no clue what is happening out there and why the market is falling so much and we don't know when and if it will revive sooner. Do what you think is best for yoursel" that would have been a lot more useful or meaningful??

The weak underbelly of crypto market gets periodically exposed. Terra Luna prices crashed 98% in just 7 days, falling from a high of $120 It to a low of 97cents yesterday. I cant even imagine that wipeout in value! It fell from $42 to just 40 cents in a single session yesterday! Many tragedy stories will emerge from this I am sure as Luna used to be one of the well traded coins until recently.
"Terra’s fall could be attributed to large scale selloffs of the LUNA tokens owing to the reported “de-peg” of the algorithmic stable coin. This sellof must have also got exacerbated with the market already being in a laregly bearish mode,” Anshul Dhir, COO and Co-founder of EasyFi Network. Is this guy for real??? Exacerbated by bearish mode???? 42 dollars to 40 cents is owing to 'bearish mode'??? Nuts!!

Algorithmic stable coins are still at the stage of evolution currently and are mere experiments.

Many different projects have been experimenting with this category of stable coins.

Hence, there is an intrinsic risk associated with it; anyone who invests or has invested in them should not blame the project founders or the industry.
Experimental algorithmic stable coins are volatile and it is believed that it will take some time to find a good algorithmic stable coin. Over a period of time such programmable money should be possible which ultimately is the end goal of decentralized finance,

It seems like 16k assault has been rebuffed today. Breaking it marginally to record 15993- probably took out the stops below 16K- and then now up by 150 points from there. Looks like some intra day shorts got cleaned out in the rally of now. This does not change the ongoing bearish picture in any way. We are now at the mercy of global events and the FIIs don't seem to be relenting. Fortunately, the inflow into domestic MFs continues, although at a lowered pace. April data for MF inflow was still acceptable.
So it seems like bears have packed in for the day and taken their profits and now will await fresh triggers to short. Bulls are licked and will need a lot of triggers to rebuild. Action should now shift to tomorrow. No point in trying BTST trades in markets like these where opening gaps have become a norm.

4QFY22 was in line, with nine out of 10 companies reporting an in-line/above PAT growth. LTM attrition again inched up across the industry, while the commentaries from the various managements indicated some moderation on quarterly annualized basis.
The IT index has been declining from Jan 22 and the FII have been consistently trimming their long position in the sector. The recent results and commentary are not going to ignite any fresh demands in the sector. On the chart attached, one can see that there is further room for the IT index to decline to the lower pitchfork channel. The RSI is also placed weak. Rallies to be used to short.

About 10 observations on the Halol plant of Sun Pharma have been made by the FDA. Typically, such news is always greeted with a push down of the price. We did see a drop today but as can be seen in the chart, the fall took support at the trendline of the last one year of trading.
The muted response may be because analysts have not factored in anything big coming from the Halol plant anyway since it has been under a cloud for a while.
If market revives, then this is a buy-dip opportunity for those interested. It is the only export focused pharma company which has been consistently delivering strong set of numbers without Halol.

After the long decline post listing- where about 75% or more of its value got knocked out- the stock seems to be ready to shift gears. Chart shows big long liquidation as it plunged to its bottom but an equally large buying as it rose from the lows at 520. Divergence patterns too were formed on the daily RSI. That helped carry prices to just above 700 and now a correction is going on. Cmp is 559 and therefore we have to pay only 39 points to find out if a bullish view created here can work i.e. stoploss at 520 levels. A correction can take the prices to 800-850 levels and that may make the trade worthwhile.