NIFTY HAS POTENTIAL UPSIDE OF 25200 HEAVY WEIGHTS TO SUPPORT THE MOVE

Dated: 24/08/2024

Nifty has so far shown a slow & steady up move towards 25000 but still has left few more points to reach the destination & beyond. Nifty remained on a muted intraday movement & has tested lot of patience of the so called adamant bulls that is why it still has bulls still have fire left in then which can take the Nifty towards a potential upside of 25200 in the coming week & we probably get to see a bullish monthly expiry probably with move above 25000 this time.

Unlike last time this time Nifty could be pushed strongly above 25000 with the pressure buildup by several heavy eight counters namely by HDFC Bank , Kotak Bank, PNB in the banking counter while Reliance from Oil & gas space while some push could be from Jio Financials as well. This mixed & join efforts by these heavy weights can give sustainable move above 25000 this time.

Nifty continued to make bullish bar on the Weekly charts & is continue to maintain the bullish biased on the coming week as well. The potential upside this time could possibly be towards 25200 while potential crucial support now lying at 24500 which now could be supported by the several factors including the positive comments by Mr. Powel for the US Fed which indicates that they are ready to cut the rates in there coming meeting ahead.

In the wholesome broader markets witnessed some key events & their outcomes last week which are described as follows:

1. Trade Deficit: India’s merchandise trade deficit widened to $23.5 billion in July 2024. This was due to a decline in exports to $33.98 billion from $35.20 billion in June, while imports rose to $57.48 billion from $56.18 billion in the previous month. The widening trade deficit has raised concerns about India’s external economic stability.

2. Regulatory Updates: The RBI introduced new guidelines to enhance transparency in digital lending and ensure consumer protection. This move aims to curb malpractices and increase confidence in the digital lending ecosystem.

3. Deposit Withdrawals: NBFCs must allow depositors to withdraw their full deposit amount within the first three months if requested due to emergencies like critical illnesses or government-declared calamities. However, these withdrawals will not accrue any interest. For non-emergency situations, depositors can withdraw up to 50% of the deposit or Rs 5 lakh, whichever is lower, without interest.

4. Maturity Notification: The RBI has shortened the notification period for deposit maturities from two months to 14 days. NBFCs are now required to inform depositors of the maturity details within this new timeframe.

 

International

1. Global Trade: The World Trade Organization (WTO) had earlier predicted a recovery in global merchandise trade for 2024, following a downturn in 2023 caused by high energy prices and inflation. However, challenges remain due to ongoing geopolitical tensions and fluctuating global demand.

2. US Federal Reserve: The US Federal Reserve now ready to cut the interest rates which could be possible in their upcoming meeting.

Meanwhile “Nifty IT” has almost tested 42000 by making high’s of 41834 on the last week potentially 1100-1200 points away from our target of 43000 mark. In the coming week ahead this counter may not perform well but he potential upside target of 43000 still remains intact while the crucial support range now have shifted higher within the desired range of 37800-38800. However with expectations of continuous outperformance by “Nifty IT” this time the upside potential in August series would still continue to remain at 43000 magnificent mark. However, we have already raised our positional target of 53000 in “Nifty IT” till March 2025 with volatilities in between the roads ahead & the second half of the 2024 is going to be of “Nifty IT” broadly. In the between the heavy weights like TCS Infosys & Wipro may continue to remain into focus.

Advance tax collection in FY till June 15 surged 27.6% to ₹1.48 lakh crore, with ₹1.14 lakh crore as corporate tax and ₹34,362 crore as personal income tax, indicating a strong economy and corporate performance.

The Centre’s gross tax collections (post refunds but before transfers to states), stood at Rs 4.6 trillion in the first two-months of the current financial year, 15.9% higher than the year year-ago level, data released by the Controller General of Accounts (CGA) showed on Friday. This is against 10.6% annual growth pegged in the Budget for FY25.

Net tax revenue (after refunds and after devolution to states) during April-May, stood at Rs 3.19 trillion, accounting for 12% of the Budget estimate of Rs 26.02 trillion. However, during the same period of FY24, net tax revenue had accounted for about 16% of the Budget target.

Institutional players were net biased on each factors last week. When FII’s continues to remain in net outflow category with net outflow of nearly Rs.1,608.89 cr. last week while DII’s continued to remain net buyer’s with net further inflow of Rs.13,110.29 cr.

Nifty last week remained positively biased with slowly & gradually heading upside towards 25000 mark. Last week Nifty made high’s of 24866.25 to give a close at 24823.15 with net gain for the week at 282.30 i.e. up by nearly 1.14%. Nifty continued to make bullish bar on the Weekly charts & bulls continue to have hope for more gains ahead. In the coming week ahead the monthly expiry could lead us above 25000 towards 25200 with crucial support now lying at 24500 kinds of levels. However, this time the potential upside could be backed by several heavy weight counters namely by HDFC Bank , Kotak Bank, PNB in the banking counter while Reliance from Oil & gas space while some push could be from Jio Financials as well.

Sensex too has made bullish bar on the weekly charts last week which denotes the bulls may continue to dominate the broader markets. In the last week Sensex made high’s of 80952.83 to give a close at 81158.98 with net gain of 722.14 i.e. up by 0.89% for the week. Sensex continued to make bullish bar on the weekly charts & bulls may continue to dominate the broader markets with potential upside of 82500 with crucial support of 79300-80400. However, this time the potential upside could be backed by several heavy weight counters namely by HDFC Bank , Kotak Bank, PNB in the banking counter while Reliance from Oil & gas space while some push could be from Jio Financials as well.

Bank Nifty still continues to have the potential upside target of 52000-52500 while the crucial support still remains at 49600-50000 kind of levels. Unlike last week where private heavy weights outperformed this week this time heavy weight banks are likely to outperform like HDFC Bank, Kotak Mahindra Bank & PNB etc.

In Nifty Financial Services may continue to have its cruial support levels of 22500-22800 with potential upside target of 23750 kind of levels

The “Nifty IT” has almost tested 42000 by making high’s of 41834 on the last week potentially 1100-1200 points away from our target of 43000 mark. In the coming week ahead this counter may not perform well but he potential upside target of 43000 still remains intact while the crucial support range now have shifted higher within the desired range of 37800-38800. However with expectations of continuous outperformance by “Nifty IT” this time the upside potential in August series would still continue to remain at 43000 magnificent mark. However, we have already raised our positional target of 53000 in “Nifty IT” till March 2025 with volatilities in between the roads ahead & the second half of the 2024 is going to be of “Nifty IT” broadly. In the between the heavy weights like TCS Infosys & Wipro may continue to remain into focus.

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:  24823.15
Nifty Immediate Target: 25000 / 25200 (As the case may be)
Nifty Immediate Support: 24500

Sensex CMP: 81086.21
Sensex Immediate Target: 82000 / 82500 (As the case may be)
Sensex Immediate Support: 79300-80400

Bank Nifty CMP:  50933.45
Bank Nifty Immediate Hurdle / Target: 52500 / 54000-55000 (As the case may be)
Bank Nifty Immediate Support: 49600-50000

Nifty Financial CMP: 23232.15
Nifty Financial Crucial Target: 23750
Nifty Financial Crucial Support: 22500-22800

Nifty IT CMP: 41089.85
Nifty IT Potential Upside: 43000 / 53000 (As the case may be)
Nifty IT Crucial Supports: 37800-38800

 

Stock on Radar:

 

Large Caps:

 

• Tata Steel (CMP 154): This large cap metal counter looks like can show some short term upside from CMP 154 towards 180 with strict SL placed at 140.

• Reliance Industries (CMP 3000): Reliance Industries has its AGM on 29^th August 2024. Possibly looking very good for the week. One can accumulate here at CMP 3000 with strict SL placed at 2866 for an estimated possible upside of 3200 in this week & 3500 in 3 months time frame.

• Tata Elxis (CMP 7088): This large cap IT giant looks like can form bottom here somewhere @7088 with strict SL placed at 6400 one can accumulate for a potential upside of 8500 in 3 months time frame.

• RVNL (CMP 573): This large-cap railways counter may get an inflow of $220 million in its recent MSCI rebalancing on 30^th August 2024 which makes this a hot counter at CMP 573 with strict SL at 500 for an estimated possible upside of 640 in 30 days time frame.

• Larsen & Toubro (CMP 3598): This infra sector giant looks good to add here at CMP 3598 with strict SL placed at 3450 for an estimated possible upside of 3800 this month itself.

• IRCTC (CMP 924): This large cap railway almost monopoly contender looks good to add here at CMP 924 with strict SL placed at 860 for a potential upside target of 1200 in 2 months time frame.

• PNB (CMP 116): A slow moving counter but definitely can form bottom here at CMP 116 with strict SL placed at 110 with potential upside of 134-145 in 3 months time frame.

• Jio Financials (CMP 327): This large-cap counter has been on our radar since subdued levels of 320 & still can be added here at CMP 327 with strict SL placed at 300 one can expect possible target of 420 in August series itself.

• HDFC Bank (CMP 1625): This large cap private banking counter looks good to accumulate here at CMP 1625 with strict SL placed at 1580 for an estimated possible upside of 1700.

  

Mid- Caps:

• Easy My Trip (CMP 41): This mid-cap tours & travel counter looks good to add here at CMP 41 with strict SL placed at 38 for an estimated possible target of 40.

• Anupam Rasayan (CMP 793): This mid-cap speciality chemical counter can form bottom here somweher at 790 with strict SL placed at 730 with possible upside of 877 within 3 months time frame.

• Infibeam Avenues (CMP 31.14): Another mid-cap IT counter looks attractive at CMP 31.14 with strict SL placed at 25 one can expect a potential upside of 40 in no time.

 

Small / Micro Caps:

• K&R Rail Engineering Ltd. (CMP 460): This small cap counter has shown strength despite volatility in the global markets. This counter looks hot to add here at CMP 460 with strict SL placed at 430 for an estimated possible target of 575 in this month 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 12+ 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.

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