Dated: 08/06/2024
Dead Dead Dead! “Bulls” dead “Bears” dead “Investors” dead “Traders” dead pretty much everyone was dead last week. Last week the wild moves on the Dalaal Street butchered everybody & left everyone puzzled with humongous moves on both the sides & closed almost right where it started the week.
Initially Nifty surged above 23300 post the announcement of Exit Polls but eventually with BJP not getting majority & forming joint government by NDA lead the drastic fall in the broader markets in a single session where Nifty, Bank Nifty & Sensex all fell from 9-10% giving teeth biting sensation to all but Nifty IT was the one standing tall & high with marginal downside of mere 0.50% that day & rise back even stronger with single day rise of 1200 points which lead the Nifty to rise back to the level where it started the week & closed at 23290.15.
As the elections are over BJP failed to get the majority but still NDA managed to form the government once again & Modi Ji will once again lead the nation in a good faith all over again. This positiveness was eventually realized by the broader markets & the fall was absorbed in mere 3 days so the next effect was nullified.
The election results were as follows:
| NDA | INDIA |
| BJP- 240 Seats | INC- 99 Seats |
| TDP- 16 Seats | SP- 37 Seats |
| JDU- 12 Seats | TMC- 29 Seats |
| Shivsena (Shinde)- 7 Seats | DMK- 22 Seats |
| LJP(Ram Vilas)- 5 Seats | Shivsena(UBT)- 9 Seats |
| NCP- 1 Seat | NCP (SP)- 8 Seats |
| NDA- 293 Seats | INDIA- 232 Seats |
The drastic volatility lead the India Vix to the high’s of 31.70 levels & eventually was melted down within mere span of 2-3 days towards the lows of 16.375 finally to settle down at 16.88 & our earlier anticipated first target of 18-19 was eventually completed & we now expect India Vix to cool off towards 14-15 till the end of June series.
Moreover, since the volatility index is expected to cool off Nifty too is expected to remain stagnant to slightly bullish & any move above 23350 can give us 23500-23700 range while on the downside 22600-22800 range remains crucial support zones.
Meanwhile our beloved “Nifty IT” index now can easily start its run-up & can test 38000 mark eventually in June series itself. We have been consistently bullish in this sector on every dip & crucial support still remains at 31200-32900 range. Post the election outcome Nifty IT has became a safe haven for those who do not want to take further risks of the market volatility so could remain in the demand.
Finally its Lok-Sabha election results day week has begun Nifty has all eyes set on the results. Nifty is likely to give uni-directional move once the election results are out & May months high’s & low’s have now become crucial for further uni-directional movement ahead in the June series. Any side breach either on the upside 23100-23200 could give us 24000 while on the downside any breach below 21800 can give us 20900-21200 kind of levels in no time.
As earlier anticipated in our earlier article Nifty faced its immediate hurdle within the pre-defined range of 23100-23200 kind of levels while on the downside so far 22500 has been acted as crucial support levels. As we move ahead all eyes now remains on Lok-Sabha election results.
Last week we have mentioned that if BJP gets any setas below 290 we could possibly witness 21800 & eventually 21000 & once it was confirmed that BJP is going to give below 290 seats Nifty crashed drastically towards 21000 in a since session making low’s of 21281.45.
The GST data shows positive development in the Indian economy on the domestic levels. As this time India has for the first time tested a magnificent level of GST collection of Rs.2, 10,267 cr. in the month of April 2024 as compared to its YoY collection of April 2023 as Rs. 1,87,000 cr. & in the month of May the GST collection was Rs.1,72,739 showing 10% growth on YoY basis. It indicates an impressive 10% Y-o-Y growth compared to last year. Top States contributing:
- Maharashtra- 26,854 crore
- Karnataka- 11,889 crore
- Gujarat- 11,325 crore
However, we have been continuously been bullish on two sectors specifically in all these volatilities i.e. Nifty FMCG & Nifty IT. In Nifty FMCG we expected it to test 57000-60000 mark till now it has almost tested 59000 & soon can test 60000 magnificent mark as well till the end of June series & heavy weights like Hindustan Unilever Limited & ITC Limited may continue to outperform. On the other hand in Nifty IT we have been consistently been bullish with immediate target remains at 38000 mark with immediate crucial support existing at 31200-32900 kind of levels. Meanwhile the heavy weights here like TCS, Infosys & Wipro are highly likely to outperform the broader markets in the coming weeks ahead.
Another factor to be considered the FII’s so far in the first week of the June series have sold stocks worth Rs. 13,718.42 cr. while DII’s were net buyer’s with stocks buying worth Rs.5,578.71 cr.. Meanwhile in the month of May FII were net negative with Rs. 42,214.28 cr. while DII’s were net buyers with net buying of Rs.55,733.04 cr.
Nifty last week initially made high’s of 23338.70 & then crashed almost 9-10% from the top to hit low’s of 21281.45 & then eventually recovering all the losses to give a positive closing for the week at 23290.15 almost net gain of 759.45 points i.e. 3.37%. As India Vix is expected to cool off eventually towards 14-15 Nifty is likely to either stay stagnant to being slightly positive. Any move above 23350 in Nifty can eventually give us 23500-23700 kind of levels while crucial supports now remain within the defined range of 22600-22800. However, the focus shall be on Nifty FMCG & Nifty IT which could be considered as safe heaven & highly bullish sectors as of now.
Sensex last week made high of 76795.31 & then crashed 9-10% to make a low of 70234.4 to eventually give a close at 76693.36. It was up almost 2928.21 i.e. up by almost 3.96% for the week. As earlier we have anticipated India Vix is expected to cool off eventually towards 14-15 Sensex is likely to either stay stagnant to being slightly positive for an estimated possible target of 77000-77700 while on the downside crucial supports now remain at 71800-73400. However, the focus shall be on FMCG & IT sector which could be considered as safe heaven & highly bullish sectors as of now.
Bank Nifty on the other is expected to find its crucial support near to 47500-48000 while on the upside immediate hurdle now lies 51200-51500 range.
In Nifty Financial Services we remain neutral for the week as immediate hurldle now lies at 23000-23200 while crucial supports now remain at 21000-21700 range.
In Nifty IT sector we have been continuously been bullish & has shown bullish sign last week itself & this sector looks like is in another bullish mode & 38000 can be easily achievable in June series itself. In fact this whole coming FY 2024-25 may remain bullish for this entire sector. Moreover these dips remain an excellent opportunity to add longs into quality heavy weight IT stocks mainly; Infosys, TCS, Wipro etc.
Till March 2024 the number of Demat Accounts has risen to whopping 14.39cr. which not only helps the capital markets directly but also directly to Equity investments.
In the FY 2023-24 so far the Direct Tax collection has amounting to whopping Rs. 18, 90,259 cr. has seen the surge of nearly 19.88% as compared to its previous year collection of Rs. 15,76,776 cr. .
Brief Levels of Nifty / Sensex/ Bank Nifty / Nifty Financials / Nifty IT:
Nifty CMP: 23290.15
Nifty Crucial Hurdle: 23500-23700
Nifty Crucial Support: 22600-22800
SENSEX CMP: 73765.15
Sensex Crucial Hurdle: 77000-77700
Sensex Crucial Support: 71800-73400
Bank Nifty CMP: 48983.95
Bank Nifty Crucial Hurdle: 51200-51500
Bank Nifty Crucial Support: 47500-48000
Nifty Financial CMP: 22221.35
Nifty Financial Crucial Hurdle: 23000-23200
Nifty Financial Crucial Support: 21000-21700
Nifty IT CMP: 35169.90
Nifty IT Potential Upside: 38000
Nifty IT Crucial Supports: 31200-32900
Stock on Radar:
Large Caps:
- MRF (CMP 127280): This large cap auto giant looks like can show us reversal from recent low’s. One can keep strict SL placed at 1,16,000 & can accumulated here at CMP 1,27,280 for an expected possible target of 1.50 lacs in 1-2 months time frame.
- GMR Airport Infra (CMP 86.70): This large cap infra company looks like can test 100 mark in no time & can be accumulated here at CMP 86.70 with strict SL placed at 70.
- Bandhan Bank (CMP 196.55): This large cap counter looks good to accumulate here at CMP 196.55 with strict SL placed at 170 one can expect an upside potential of 229.
- Motherson Sumi (CMP 157): This large cap auto counter looks good only above 160 with strict SL placed at 130 for an estimated possible target of 200 within 2 months time frame.
- ICICI Prudential Life (CMP 571): This large cap counter looks good to accumulate here at CMP 571 with SL placed at 540 for an estimated possible target of 611.
- Jio Financials (CMP 353): This large-cap counter has been on our radar since subdued levels of 320 & still can be added here at CMP 353 with strict SL placed at 300 one can expect possible target of 420 in July series.
- Infosys (CMP 1533): This large cap IT counter has been on our radar since subded levels of 1400 & still looks hot at CMP 1533 & has shown some sharp pull back lately with Nifty IT being bullish now this heavy weight giant of IT sector looks good to accumulate here at CMP 1533 with strict SL placed at 1300 for an estimated possible target of 1700-1850 within next 4-6 months time frame.
- Wipro (CMP 485): Another large-cap IT counter which has been on our radar since subdued levels of 439 & still looks like available on attractive price at CMP 485 & can be added on dips towards 430 with strict SL placed at 400 expect a price target of 540-620 within 6 months time frame.
- TCS (CMP 3894): This large cap IT counter has been on our radar since subdued levels of 3670 & still looks good to accumulate here at CMP 3894 with SL placed at 3400 for an estimated possible target of 4200 in June series.
- Adani Enterprises (CMP 3220): As the BJP is coming back Adani stocks once again can reclaim the glory so one can add here at CMP 3220 with strict SL placed at 2850 one can expect it to re test the high’s of 3800-4000 in no time.
Mid- Caps:
- IPCA Labs (CMP 1170): This mid-cap pharma looks like can form short term bottom here at 1170 & can test 1255 with strict SL placed 1077 .
- IDFC Limited (CMP 115): This mid-cap NBFC counter can for short term bottom here at CMP 115 with strict SL at 100 one can expect upside potential of 150.
- AWL (CMP 356): As the Adani stocks will remain in focus AWL has been on sideways since long. One can accumulate here at CMP 356 for an estimated possible target of 456 with strict SL placed at 300.
- PVR (CMP 1338): PVR has shown some improvement in its recent results announced. It has already discounted all the loss in the recent quarters. Looks good to accumulate here at CMP 1338 with strict SL placed at 1200 for an estimated possible target of 1550-1600 in 3 months time frame.
- KRBL (CMP 281): This rice stock has been on correction mode since last few months due to el-nino news lately but looks like can form some bottom here somewhere & can be accumulated here at CMP 281 with SL placed at 240 for an estimated possible target of 355 within few months.
Small / Micro Caps:
- Bartronics (CMP 18.95): This micro-cap counter can be accumulated here at CMP 18.95 with strict SL placed at 1this counter can hit 40-45 from hereonwards.
- Monte Carlo Fashion (CMP 585): This micro-cap counter looks good toaccumulate here at CMP 585 with strict SL placed at 500 one can expect it to rise towards 1000 in this FY itself
About the Author:
Mr. Vishal Gupta a SEBI Registered Research Analyst is the founder of “VG STOCK RESEARCH”, founder of “THE ANALYSIS ROOM”, a writer & an advisor having rich experience in Indian Equity Markets who has spent years comprehending an industry wide shift and risk management with more than 9+ years exploring in depth analysis of the Equity & Derivatives with accuracy of 90% and above.
He has also been into teaching Fundamental Analysis for quite some time giving investors/traders comprehensive knowledge & skills of Indian Equity Markets.
Email I’d: contactatvgstockresearch.com
Contact: +91-9953934544
Website: https://vgstockresearch.com/
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