Dated: 26/10/2024 : Diwali 2024 Special Edition
Indian Equity Markets have shown lot of hope for bulls since the last Diwali of 2023 to the current Diwali of 2024. However, it all has been a roller coaster ride with bulls & bears fighting across the line of Dalaal Street. Nifty has surged over 37% in between the previous Diwali & this Diwali in just a year time frame. This ferocious rally has shown tremendous strength of bulls following continuous growing Monthly SIP which now comprises more than Rs.23,000 cr. p.m. which helped the DII’s to inflow of nearly Rs. 4,37,702.69 cr. in the year 2024 so far.
Over the last few years (4 yrs to be precise) Institutional activities have played differently let it be foreign or Domestic. The FII’s have consistently been net sellers with over Rs. 6 Lacs crore worth of selling in just last 4 preceding Financial Years while during the same time period DII’s have been a consistently net buyer with nearly Rs. 10 lacs crore worth of buying prominently dominating the entire Dalaal Street by themselves where the entire Indian Domestic markets was purely supported by them & removing any pre-existing myth that only FII’s control the Indian Equity markets.
In the month of October 2024 along FII’s have sold whopping Rs.1,00,242.17 cr. which lead the Nifty down by almost 8.38% from its top of 26277.35 & it’s only 4 trading sessions left in October series Nifty currently standing right at 24180.80 still bottom needs to be done more with precise stability rather than one shot reversal. Major portion was covered up & supported by DII’s with now FII’s long position standing somewhere near 30% this has further scope to fall near to 20-25% maximum & history has shown whenever FII’s have this much of low level positions the bottom has been made somewhere near.
This time once the base is setup then start of the next leg of rally may began & this may lead to Nifty to rise towards mount 30000 mark & Sensex to hit 1,00,000 mark by next Diwali which denotes more than 24-25% potential upside in both the indices followed by “Nifty IT” which has potential upside of towards 53000 i.e. 26% from the current levels of 42038.85. All these indices have some crucial support levels for the next 1 yr which could play a crucial reversal zone from current selling pressures are 22800-23500 in Nifty while in Sensex crucial support zone could be around 73400-76000 zone & in “Nifty IT” crucial support zone remains at 36000-39000 kind of levels.
Indian government have target to make India a $ 5 trillion economy by 2025 which currently is a $ 4 trillion economy so if Indian achieves its target of 5 trillion by 2025 Indian indices will achieve our desired target zones of 30000 & 1 Lac i.e. Nifty & Sensex subsequently. Other major indices which likely to support the move would be “Nifty IT”, “Nifty Bank” & Nifty Infra & Agricultural sector.
Last week institutional activities remained intact with massive selling by FII’s with over Rs. 20024.27 cr. & overall in this month itself FII’s have been net seller with whopping nearly Rs. 1 lac crore in this month itself while FII’s have been contrary with net buying in the last week with Rs. 22,914.63 while remained net buyers with massive Rs. 93,000cr & more buying in this month. Major portion was covered up & supported by DII’s with now FII’s long position standing somewhere near 30% this has further scope to fall near to 20-25% maximum & history has shown whenever FII’s have this much of low level positions the bottom has been made somewhere near.
In the wholesome broader markets witnessed some key events & their outcomes last week which are described as follows:
Domestic News:
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TRAI Data for August 2024:
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Bharti Airtel lost 24 lakhs subscribers
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Idea lost 18 lakhs sub subscribers
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Jio lost 40 lakhs subscribers
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BSNL added 25 lakhs subscribers
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BRICS Nation GDP growth forecast 2024 India -7.0%
- Anil Ambani Reliance industries said they will invest 100 billion rupees over next ten years on a project to produce explosives. Ammunition and small arms.
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PAYTM Q2 fintech post Rs 928crores PAT on one- time gain, revenue slides 34% YoY
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AMBUJA cement ltd has announced that it will acquire a 37.9% stake in Orient cement.
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Spiece jet resolve $4.5 Mn dispute with Shannon Engine support for $2 Mn
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India mid cap stocks head for correction as growth outlook sours
International
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Russia Pitches BRICS Payment system aiming to Break US dominance.
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Shell, BP & Exxon all see feeble refining margins weighing on Q3 profit
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AMAZON is currently only looking at wind and solar to offer green power project in Asia
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BLACK ROCK hits $11.5 trillion of assets as private market grow
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UK Economy returns to Growth; BP adds to a bleak picture for the oil industry.
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Dubai ‘s Damac group to spend $ 1 billion in Thai data center
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Israel’s government has yet to decide how to retaliate against Iran for a missile attack last week
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Romanian inflation inches lower as further rate cuts uncertain
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UK economy grew 0.2% in august after two months of stagnation
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FTX customer claims Hedge fund cheated him on bankruptcy gains
As history has proven whenever indices / broader markets have to make bottom the major support always comes from the heavy weights stocks first then afterwards remaining counters follow-on the turnaround. This time too this won’t be different the bottom formation along with the follwon buying & leading the different indices towards another ATH would be supported only by heavy weights first like; Reliance Industries (Record date for Bonus is set for 28/10/2024), TCS, HDFC Bank, SBI & PNB
All these volatilities have hit the “Nifty IT” marginally last week but broader range still denotes the ongoing consolidation before a major rally begins. In all these turmoil & bottom formation the one sector which stood tall was “Nifty IT” which remained untouched in last 3 weeks as of now 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 36000-39000 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 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.
Nifty last week saw continues selling pressure from FII’s massive selling. Nifty made the initial low of 24073.90 to give a close at 24180.80 with net negative of nearly 2.30% for the week. Moreover when it comes to the major 1 yr time frame from this Diwali 2024 to the coming Diwali of 2025 the crucial support for this long time horizon now remains at 22800-23500 with potential upside towards 30000 Golden Mark. . Meanwhile this base formation at 22800-23500 can trigger bigger targets in medium term with potential upside towards 30000 mark till Diwali 2025. 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. (Record Date for Bonus Issue 28/10/2024, TCS, HDFC Bank, SBI & PNB etc.
Sensex on the other hand gave a close at 79402.29 with net negative of 1822.46 points i.e. net loss of 2.29% almost. The crucial support for the major 1 yr time frame now remains within the desired range of 73400-76000 with potential upside towards 1 Lac Golden Mark. 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. (Record Date for Bonus Issue 28/10/2024), TCS, HDFC Bank, SBI & PNB etc.
Bank Nifty is the one sector which cannot be left behind as without its support the entire markets cannot go up. This sector has its 1 yr crucial support range standing right at 44600-46000 with potential upside towards 60000-63000 mark. 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 the Nifty Financial Services immediate crucial support remaining within the desired range of 20900-21600 with potential upside towards a golden mark of 27000-30000
All these volatilities have hit the “Nifty IT” marginally last week but broader range still denotes the ongoing consolidation before a major rally begins. In all these turmoil & bottom formation the one sector which stood tall was “Nifty IT” which remained untouched in last 3 weeks as of now 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 36000-39000 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 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: 24180.80
Nifty Potential Target : 30000
Nifty Crucial Support: 22800-23500
Sensex CMP: 79402.29
Sensex Potential Target: 100000
Sensex Crucial Support: 73400-76000
Bank Nifty CMP: 50787.45
Bank Nifty Potential Target: 60000-63000
Bank Nifty Crucial Support: 44600-46000
Nifty Financial CMP: 23732.70
Nifty Financial Potential Target: 27000-30000
Nifty Financial Crucial Support: 20900-21600
Nifty IT CMP: 42038.85
Nifty IT Potential Upside: 53000 (As the case may be)
Nifty IT Crucial Supports: 36000-39000
Stock on Radar:
Large Caps:
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LIC (CMP 903): This large cap counter has a poised upside of 2000+ kind of levels with crucial support remaining at 750-820 till the next Diwali.
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Reliance (CMP 2656): Reliance has its record date for bonus of 28/10/2024 where the adjust rate could be around 1328 & this counter looks good to buy on 1300-1330 range with potential upside of 2000 with crucial support remaining @1170-1200.
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Cochin Shipyard (CMP 1365): This shipyard counter looks like can form potential bottom here after correcting nearly 50% from the top. If this sustains here at 1365 with crucial SL at 1100 we can get the bounce towards 2200 in next 1 yr time frame.
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TCS (CMP 4057): After the dovish results this counter has some strong positive brokerage counter radar. Looks attractive add here at CMP 4057 & can be added more if comes to 4000 with strict SL placed at 3700 one can have a positional target of 5000-5200.
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PNB (CMP 96): This large-cap PSU bank looks good to accumulate here at CMP 96 with strict SL based at 88 for an estimated possible target of 200 in 1 yr time frame.
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Jio Financials (CMP 311): 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 311 with strict SL placed at 240 for an estimated possible target of 520-700 in 3 months to 12 months time frame.
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ITC (CMP 482): This large cap counter looks good to add here at CMP 482 & can add more on dips towards 440 with potential upside towards 700 in a year time fram.
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Wipro (CMP 543): This large cap IT counter has recently announced bonus of 1:1. This bonus announcement could be great for 2-3 months time frame with potential 50% upside from CMP 543 with SL placed at 490.
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AB Capital (CMP 203): This large cap NBFC counter looks good to add here at CMP 203 with potential upside of 70-80% in a year time frame.
Small & Mid-Caps:
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Hathway Cable & Datacom (CMP 19): 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.
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
Contact: +91-9953934544
Website: https://vgstockresearch.com/
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