BULLS LIGHTING UP THE PACE NIFTY IS ALL READY FOR A FEROCIOUS RALLY TOWARDS 25900!

Dated: 12/10/2024

As we have discussed over last week Nifty did made a short term bottom around 24700-25100 range while it is still to make a potential upside of 25500-25900 in the coming weeks ahead. However, the broader term remains on the bottom formation within the range of 24700-25100 with heavy weights likely to outperform which will remain the main cause of further potential upside towards 25500-25900 levels.

Nifty though made the short term bottom while Bulls struggled for a potential upside due to relentless selling pressure by FII’s as they have sold nearly Rs. -27,674.99 cr. in a single week & so far more than Rs.67,000 cr. in the month of October 2024 itself but here DII’s have been the best buyer’s with Rs. 31,363.61 cr. last week which helped Nifty to somehow give a close with mere 50.53 points downside i.e. 0.20%. FII’s have been brutal but history has shown whenever FII’s have shown merciless selling pressure we somehow make another bottom supported by DII’s massive buying as monthly retail SIP data surpassed Rs.23,000 cr.

However, Nifty’s Weekly PCR is near 0.75 & Monthly PCR remains at 1.47 while FII’s net long as on 11th of October 2024 remains at 36% which can go maximum upto 20-25% & these low long levels of FII’s defines that they do not have much further to add pressure in the broader markets & if this is supported by DII’s continuous buying we could form a strong bottom here for a big rally till March 2025 where Nifty could hit 30000 but that’s a long shot & here in October series we could possibly hit 25500-25900 on a immediate basis.

As Dalaal Street is all set for a potential upside the major movement could be supported well by few heavy weights like; Reliance Industries Ltd. (Results on 14^th October 2024), TCS (brokerage firms outlook remains positive post results), HDFC Bank, SBI & PNB etc.

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

Domestic News:

• India Fx Reserves, USD ACTUAL: 701.18 Billion

• The Indian Rupee fell past 84 to a US dollar for the first time as foreigners sold the country’s stock and bonds

• Noel Tata Appointed as chairman of TATA TRUST.

• RBI GovernorShakti Kanta Das announced that the repo rate, the rate at which the RBI lends to commercial banks, would remain unchanged at 6.5%, GDP growth estimates were retained at 7.2%, CPI INFLATION forecast for FY25 remained at 4.5%, SDF rate unchanged at 6.25%&MSF rate unchanged at 6.75%

• Reliance Industries: Board meeting on OCT 14 to consider Q2 results.

• HDFC: Co Board approved sale of 100% stake in HDFC EDU to VAMA SUNDARI Investment, sale worth 1.92B Rupee.

• A former GOLDMAN SACHS Groups inc. manager has a $ 5 million sex- discrimination claim against the investment bank, alleging he was unfair fired for taking six months of paternity leave.

International

• Russia Pitches BRICS Payment system aiming to Break US dominance.

• Shell, BP & Exxon all see feeble refining margins weighing on 3Q profit

• AMAZON is currently only looking at wind and solar to offer green power project in Asia

• BLACK ROCK hits $11.5 trillion of assets as private market grow

• UK Economy returns to Growth; BP adds to a bleak picture for the oil industry.

• Dubai ‘s Damac group to spend $ 1 billion in Thai data center

• Israel’s government has yet to decide how to retaliate against Iran for a missile attack last week

• Romanian inflation inches lower as further rate cuts uncertain

• UK economy grew 0.2% in august after two months of stagnation

• FTX customer claims Hedge fund cheated him on bankruptcy gains

• Oil set for weekly gain as Israel plan to response Iran attack

• Gold set weekly loss as mixed US data muddy fed’s rate path

 

In all these turmoil & bottom formation the one sector which stood tall was “Nifty IT” which remained untouched in last 2 weeks where investors / trades remained into panic with bleeding portfolio but this sector stood tall. In our overall view “Nifty IT” sector continues to have its crucial support within the pre-defined range of 40000-41500 till the time this remains safe the broader trend in this sector is likely to remain unchanged i.e. bullish in short term as well as long term. The pre-defined upside potential of “Nifty IT” remains at 45000 on an immediate basis i.e. in short term while our positional view towards 53000 mark till March 2024 remains intact in the second half of the FY 2024-25. 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.

In the institutional segment the FII’s have massively sold nearly Rs. -27,674.99 cr. in a single week & so far more than Rs.67,000 cr. in the month of October 2024 itself but here DII’s have been the best buyer’s with Rs. 31,363.61 cr. last week which helped Nifty to somehow give a close with mere 50.53 points downside i.e. 0.20%. FII’s have been brutal but history has shown whenever FII’s have shown merciless selling pressure we somehow make another bottom supported by DII’s massive buying as monthly retail SIP data surpassed Rs.23,000 cr.

Nifty last week remained on a tight range with possible bottom formation in the short term. However, Nifty closed with marginal red of 50.35 points i.e. net loss of 0.20% for the week. Nifty formed a possible bottom within the pre-defined range of 24700-25100 with potential upside in coming weeks ahead of 25500-25900 range in October 2024 series. Meanwhile the entire follow-up is set for a potential upside the major movement could be supported well by few heavy weights like; Reliance Industries Ltd. (Results on 14^th October 2024), TCS (brokerage firms outlook remains positive post results), HDFC Bank, SBI & PNB etc.

Sensex on the other hand followed the Nifty with nominal downside of 307.09 points i.e. net loss of 0.37% for the week to give a close at 81381.36. Sensex also followed our pre-defined bottom formation range level of 79000-81000 with potential upside in coming week & in the October 2024 series 84000-85000 kind of levels. However, the entire follow-up is set for a potential upside the major movement could be supported well by few heavy weights like; Reliance Industries Ltd. (Results on 14^th October 2024), TCS (brokerage firms outlook remains positive post results), HDFC Bank, SBI & PNB etc.

Bank Nifty too is formerly making bottom within the pre-defined range of 49000-51500 with potential upside of 53000-54000 in the coming weeks ahead. The broader range could be support by certain heavy weight Private Banks like HDFC Bank & some PSU heavy weight banks like PNB & SBI etc.

In Nifty Financial Services immediate support could be found anywhere between 22500-23100 with potential upside towards 24600-25000 kind of levels.

In all these turmoil & bottom formation the one sector which stood tall was “Nifty IT” which remained untouched in last 2 weeks where investors / trades remained into panic with bleeding portfolio but this sector stood tall. In our overall view “Nifty IT” sector continues to have its crucial support within the pre-defined range of 40000-41500 till the time this remains safe the broader trend in this sector is likely to remain unchanged i.e. bullish in short term as well as long term. The pre-defined upside potential of “Nifty IT” remains at 45000 on an immediate basis i.e. in short term while our positional view towards 53000 mark till March 2024 remains intact in the second half of the FY 2024-25. In the between the heavy weights like TCS Infosys & Wipro may continue to remain into focus.

Till August 2024 the number of Demat Accounts has risen to whopping 17.11cr. this not only helps the capital markets directly but also directly to Equity investments.

The monthly SIP in Indian markets now raised at Rs. 23000 cr. per month.

 

Brief Levels of Nifty / Sensex/ Bank Nifty / Nifty Financials / Nifty IT:

Nifty CMP:  24964.25
Nifty Immediate Target : 25500-25900 / 30000 (As the case may be)
Nifty Immediate Crucial Support: 24700-25100

Sensex CMP: 81381.36
Sensex Immediate Target: 84000-85000
Sensex Immediate Crucial Support: 79000-81000

Bank Nifty CMP:  51172.30
Bank Nifty Immediate Target: 53000-54000
Bank Nifty Immediate Crucial Support: 49000-51500

Nifty Financial CMP: 23612.55
Nifty Financial Crucial Target: 24600-25000
Nifty Financial Crucial Support: 22500-23100

Nifty IT CMP: 42335.70
Nifty IT Potential Upside: 45000 / 53000 (As the case may be)
Nifty IT Crucial Supports: 40000-41500

 

Stock on Radar:

Large Caps:

 

• Bandhan Bank (CMP 212): This large-cap private banking counter has been facing continuos resistance on all the chart time frame but this time looks poised for a possible breakout. One can accumulate here at CMP 212 with strict SL placed at 180 if it sustains above 225 we could possible get to see this counter at 300 kind of levels.

• TCS (CMP 4149): After the dovish results this counter has some strong positive brokerage counter radar. Looks attractive add here at CMP 4149 & can be added more if comes to 4000 with strict SL placed at 3700 one can have a positional target of 5000 in next 6 months time frame.

• PNB (CMP 105): This large-cap PSU bank looks good to accumulate here at CMP 105 with strict SL based at 100 for an estimated possible target of 125 in no time.

• Jio Financials (CMP 341): This large cap NBFC counter has been on our radar since subdued levels of 230-250 & still looks for a poised upside from here onwards 341 with strict SL placed at 300 for an estimated possible target of 520 in 3 months time frame.

• Reliance (CMP 2744): If Nifty has to inch higher then this counter has to perform with possible announcement of Bonus this month this particular counter remains an attractive play. One can add here at CMP 2744 with strict SL placed at 2600 for an estimated possible target of 3400 in 2 months time frame.

• LIC (CMP 948): This large ca counter looks like is on the attractive price range one can accumulate here at CMP 948 & can add more 920 SL placed at 880 expect an upside potential of 1200+ kind of levels.

• SBI Cards (CMP 733): This large cap has been on our radar since subdued levels of 700 & beneath & still looks good to accumulate here at CMP 733 with strict SL placed at 720 for target 1000 & above in 2 months time frame.

• Hind Zinc (CMP 504): This large cap metal counter looks attractive to add here at CMP 504 with strict SL placed at 470 for an estimated possible target of 590.

 

Mid- Caps:

• IRB Infra (CMP 59.45): This mid-cap reality counter looks like is all done for a sideways consolidation here at CMP 59 with potential SL placed at 54 this counter is poised for 80 in 2 months time frame

 

Small & Mid-Caps:

• Hathway Cable & Datacom (CMP 20): This small cap counter looks like can move 20-25% in short term with marginal SL placed at 18 once can accumulate here at CMP 20 with potential upside towards 25-26.

• Gandhar Oil (CMP 235): This Oil & refinery small cap counter has been on our radar since subdued levels of 215 still looks attractive to add on dips towards 225 with strict SL placed at 170 one can expect an upside potential of 320 in a year time frame.

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.

Email I’d: contact@vgstockresearch.com
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