Dated: 03/08/2024
Another week another ATH the same story continues as Nifty made another ATH of 25078.30 last week on back of Institutional investors massive cash liquidity which we have mentioned on our previous article. However, the global cues lead the Nifty to draw down from the top & close with the red candle not only daily charts but also on the weekly charts making a Bearish candlestick pattern on Weekly charts.
The indices shown some strong nod last week but failed to sustain the gains as bears took the grip into their own hands. Nifty made another ATH of 25078.30 but gave a week close towards 24717.70 forming a Bearish Candlestick pattern on Weekly charts. 25000 has been so far an obsession for the Bulls which they are not been able to sustain the gains since last 3 consecutive weeks on a closing basis. This makes 25000 as inhabitable zone for Bulls where most are failing to sustain. So, on the downside immediate target looks at 24500 & any move below this one can expect 24000 kind of levels as an strong contender.
The incapability of the Bulls last week was not due to domestic factors but the pressure from Global markets specifically from US markets where US Vix rose by almost 50% raising fears on instability among the Bulls while Dow Jones Futures raising fears of testing 38000 mark in the coming week ahead. Nasdaq Futures however have higher probability of hitting 17600 in the coming weeks.
The recent news regarding US job data & other Industrial outputs lead the fear across the global markets but this fears doesn’t seems to be effective more than a week. As maximum downside expected in the Nifty is towards 24000 only (Major correction is expected only on breaching this level) while on the upside potential can only be determined once a bullish closing above 25000 is achieved in Nifty & thereafter maximum potential upside in the current month estimates at 25450 as of now.
The Federal Reserve held interest rates steady on Wednesday but opened the door to reducing borrowing costs as soon as its next meeting in September as inflation continues coming into line with the U.S. central bank’s 2% target.
Meanwhile our most favorite sector “Nifty IT” may remain under certain pressure & if it comes towards 38000-36000 levels use these levels to accumulate heavy longs as on a positional basis we have raised our target of 53000 magnificent mark till March 2025 though it’s going to be a bumpy ride lots of ups & downs but this target may eventually be achieved. In the between the heavy weights like TCS Infosys & Wipro may continue to remain into focus.
The Indian government’s direct tax collection increased by 20.99% YoY to ₹4.62 lakh crore from April 1 June 17, boosted by a 27.34% increase in advance tax collection. The gross direct tax collection was ₹5.15 lakh crore, up 22.19% from the previous year. The income tax department issued refunds totaling ₹53,322 crore, 33.70% higher than the previous year.
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 remained in net outflow of nearly Rs.12,756.26 cr. last week while DII’s continued to remain net buyer’s with net further inflow of Rs.17,226.06 cr.
Nifty last week made another ATH by making high of 25078.30 to give a bearish close at lower levels of 24717.70 with net negative points of 117.15 i.e. down by almost 0.47% forming Bearish candlestick chart pattern not only on Daily charts but also on Weekly charts which denotes more pressure is highly likely to remain in the coming week as well. As we move ahead Nifty is likely to find its immediate downside at 24500 & any move below could lead us towards 24000 kind of levels (Major correction is expected only on breaching this level) while on the upside potential can only be determined once a bullish closing above 25000 is achieved in Nifty & thereafter maximum potential upside in the current month estimates at 25450 as of now. However, the sector specific movement is highly likely to remain into the focus. On a specific sector remains sideways to highly bullish on Nifty IT (if it comes to 38000-36000 levels then longs can be initiated) with heavy weights like TCS Infosys & Wipro may continue to outperform the broader markets.
Sensex too made another ATH towards 82129.49 to eventually giving a bearish closing at 80981.95 with net loss of more than 350 points merely losing 0.50% almost for the week forming Bearish candlestick chart pattern on daily as well as on Weekly charts. Now the immediate downside remains at 80400 while any breach below could lead towards 78000-79000 kind of levels (Major correction only breaching of below levels). However the potential upside only remains on breaching 82200 & that can lead towards 83500 maximum in the month of August series. However, the sector specific movement is highly likely to remain into the focus. On a specific sector remain sideways to highly bullish on IT sector with certain dips in this market & heavy weights like TCS Infosys & Wipro may continue to outperform the broader markets.
Bank Nifty on the other hand immediate downside support remains at 50000 while major upside seen only on breaching of 52500 kinds of levels. However, the heavy weight giants here HDFC Bank, Kotak Mahindra Bank highly likely to outperform the broader markets in the Private Banks sector while PSU Bank like State Bank of India & Bank of Baroda are likely to underperform in the coming weeks ahead.
In Nifty Financial Services the crucial support now lies at 22800 kinds of levels with potential upside expected towards 23850-24000 kind of levels.
In Nifty IT sector some pressure is expected in the coming week ahead due to US job & recession news. However if “Nifty IT” tests the low’s of 38000-36000 from there the heavy longs can be created for an estimated possible target of 53000 mark by the end of March 2025. In fact the upcoming second half of the FY 2024-25 would be completely of “Nifty IT” sector boosting heavy weights like TCS, Infosys & Wipro etc. We have now upgrading our positional target in Nifty IT towards 53000 magnificent mark by March 2025 any cool off towards 38000-36000 remains an opportunity to add long heavy longs. Stay bullish in this sector with any marginal dip in the heavy weight counter like 5-7% would be an excellent opportunity to add up the longs.
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: 24717.70
Nifty Immediate Hurdle: 25000 / 25450 (As the case may be)
Nifty Immediate Downside Target: 24500 / 24000 (As the case may be)
Sensex CMP: 80981.95
Sensex Immediate Hurdle: 82200 / 83500 (As the case may be)
Sensex Immediate Downside Target: 80400 / 78000-79000 (As the case may be)
Bank Nifty CMP: 51350.15
Bank Nifty Immediate Hurdle / Target: 52500 / 54000-55000 (As the case may be)
Bank Nifty Immediate Support: 50000
Nifty Financial CMP: 23365.90
Nifty Financial Crucial Target: 23850-24000
Nifty Financial Crucial Support: 22800
Nifty IT CMP: 39730.30
Nifty IT Potential Upside: 42000 / 53000 (As the case may be)
Nifty IT Crucial Supports: 38000 / 36000 (As the case may be)
Stock on Radar:
Large Caps:
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SBI (CMP 848): State Bank of India after its muted results lately looks like can show some cool off towards 790 from CMP 848 with strict SL placed at 890.
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Bank of Baroda (CMP 244): Another large cap PSU Bank counter looks like can show some cool off towards 220 if it move below 240. However, one can keep strict SL placed at 261.
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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 July of August series.
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Wipro (CMP 502): This IT giant has been on our radar since 445 levels from there it has already tested 575 & shown some correction lately due to results effect. This counter still looks hot to add on dips towards 490 with strict SL placed at 475 for an estimated possible target of 550-575.
Mid- Caps:
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Campus Activewear (CMP 310): This mid-cap footwear stock has been on our radar since subdued 223 levels but still looks attractive to buy on dips towards 290 for an estimated possible target of 366 with strict SL placed at 260 within 3 months time frame.
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Devyani International (CMP 178): Devyani International most famously known as “Pizza Hut” looks good to add on dips towards 170 with strict SL placed at 160 for an estimated possible target of 200-210 in no time.
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Anupam Rasayan (CMP 783): This mid-cap specialit chemical counter has been on our radar since subdued levels of 783 one can still add it here 790 with strict SL placed at 700 for an estimated possible target of 970-1200 within next 6 months time frame.
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KRBL (CMP 294): This rice sector giant has been on radar from 268 levels. This still looks attractive at CMP 294 with strict SL placed at 270 one can expect an upside potential of 427 in 3 months time frame.
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RBL Bank (CMP 227): This mid-cap banking counter has been on correction mode lately but posted excellent results. This looks attractive at here CMP 227 with strict SL placed at 220 for an estimated possible target of 270-320 in 6 months time frame.
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Adani Wilmar (CMP 383): This counter has been on radar since subdued levels of 325 one can still add it here at CMP 383 with SL placed at 300 for an estimated possible target of 500 in no time.
Small / Micro Caps:
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K&R Rail Engineering Ltd. (CMP 466): This small cap counter has shown strength despite volatility in the global markets. This counter looks hot to add here at CMP 466 with strict SL placed at 430 for an estimated possible target of 575 in this month itself.
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Anmol India (CMP 33): This micro cap counter looks good to accumulate here at CMP 33 with strict SL placed at 30 one can expect an upside potential towards 40-41 in no time.
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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