NIFTY LIKELY TO HIT 30000 BY MARCH 2025 BANK NIFTY MADE BULLISH ENGULFING

Dated: 19/10/2024

With bulls first leading up the pace last week eventually bears took the things into their own hands with the help of massive continuous FII’s selling pressure on the Dalaal Street & Nifty tested the lower end of the channel before making the crucial support as well as reversal zone from 24400-24500.

Nifty though made the bottom around 24700-25100 previous to last week but last week SL hunting for the week was done & another meaningful bottom was eventually made at 24400-24500 kind of levels with Nifty’s eventual low of 24567.65 with the support of Bank Nifty making Bullish Engulfing broader markets remained on the upper hand & Bulls may continue to remain on stratosphere with potential upside of 25500-25900 in the coming weeks ahead.

Nifty remained under pressure with massive FII’s selling with more than Rs.80,000 cr. selling so far in the month of October 2024 with this too Nifty only fell with mere 6.50% almost as the whole intense fall was absorbed by DII’s massive buying worth Rs.74,176.20 cr. so far in October 2024. 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.

Nifty now proposed crucial support remains at 24400-24500 range with potential upside of 25500-25900 range within the coming week or the following week itself. The Nifty’s weekly PCR now remains at lower levels of 0.75. Once the FII’s long positions comes to near 20-25% & Nifty PCR remains on oversold levels of 0.45-0.75 the potential bottom could be made around 24400-24500 with potential upside of 2500-25900 in October 2024 series itself while Nifty may form a medium bottom as well in these range with major potential upside of 30000 till the end of March 2025.

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., 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:

• Gold Climbs to Record as West Asia Tensions Spark Haven Demand

• IMF global public debt to be exceed $100 trillion by 2024

• Domestic institutional investors (DIIs), who have been quite aggressive buyers of shares in the stock market, have invested over Rs 4 lakh crore in the current calendar year till date.

• The IPO of Hyundai Motors India Limited has garnered a moderate response from investors, achieving a subscription rate of 2.37 times as of October 17, 2024. The company has successfully raised ₹27,870.16 crore from the IPO, which comprises only an offer-for-sale (OFS)

• Average GDP growth rates for the next 10 years by country INDIA IS + 6.3%. INDIAGDP $ 3.4 trillion

• India National debt $ 3.3 trillion

• Vistara, a joint venture between the Tata Group and Singapore Airlines Limited (SIA), is set to formally merge with Air India on November 12, 2024.

International

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

• Shell, BP & Exxon all see feeble refining margins weighing on Q3 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

 

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 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. 21,823.34cr. in a single week & so far more than Rs.80,217.90 cr. in the month of October 2024 itself but here DII’s have been the best buyer’s with Rs. 16,384 cr. last week which helped Nifty to retain the bottom of 24400-24500. 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. p.m.

Nifty last week saw continuous pressure from FII’s massive selling. The close at 24854.05 with mere 110 points net negative i.e. 0.44% for the week denotes good bottom formation near the crucial support range of 24400-24500 with this the potential upside within the next coming week & further in October 2024 series would be 25500 & 25900. Meanwhile this base formation at 24400-24500 can trigger bigger targets in medium term with potential upside towards 30000 mark till March 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. , TCS (brokerage firms outlook remains positive post results), HDFC Bank, SBI & PNB etc.

Sensex on the other hand gave a close at 81224.75 with net negative of 156.61 i.e. net loss of 0.19% for the week. With potential bottom formation within the range of 79000-81000 further potential upside could remains at 84000-85000. Meanwhile medium term target for the potential upside now remains at 1,00,000 till March 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. (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 & made bullish engulfing on Daily charts while on Weekly charts it has made Hammer kind of pattern 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 25000 kind of levels.

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 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:  24854.05
Nifty Immediate Target : 25500-25900 / 30000 (As the case may be)
Nifty Immediate Crucial Support: 24400-24500

Sensex CMP: 81224.75
Sensex Immediate Target: 84000-85000
Sensex Immediate Crucial Support: 79000-81000

Bank Nifty CMP:  52094.20
Bank Nifty Immediate Target: 53000-54000
Bank Nifty Immediate Crucial Support: 49000-51500

Nifty Financial CMP: 23938.10
Nifty Financial Crucial Target: 25000
Nifty Financial Crucial Support: 22500-23100

Nifty IT CMP: 42106.50
Nifty IT Potential Upside: 45000 / 53000 (As the case may be)
Nifty IT Crucial Supports: 40000-41500

 

Stocks on Radar:

Large Caps:

 

• MCX (CMP 6561): This stock exchange has posted good results lately & looks good to add here for short term bounce of 20% from CMP 6561 with strict SL placed at 6200.

• Cochin Shipyard (CMP 1564): This shipyard counter looks like can form potential bottom here after correcting nearly 45-50% from the top. If this sustains here at 1564 with crucial SL at1370 we can get the bounce towards 2200 in next 6 months time frame.

• Reliance (CMP 2720): 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 2720 with strict SL placed at 2600 for an estimated possible target of 3400 in 2 months time frame.

• TCS (CMP 4123): After the dovish results this counter has some strong positive brokerage counter radar. Looks attractive add here at CMP 4123 & 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 103): This large-cap PSU bank looks good to accumulate here at CMP 103 with strict SL based at 100 for an estimated possible target of 125 in no time.

• Jio Financials (CMP 330): 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 330 with strict SL placed at 300 for an estimated possible target of 520 in 3 months time frame.

• Wipro (CMP 548): 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 20% upside from CMP 548 with SL placed at 490.

• SBI Cards (CMP 740): 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 507): This large cap metal counter looks attractive to add here at CMP 507 with strict SL placed at 470 for an estimated possible target of 590.

 Mid- Caps:

• IRB Infra (CMP 56): This mid-cap reality counter looks like is all done for a sideways consolidation here at CMP 56 with potential SL placed at 54 this counter is poised for 80 in 2 month’s time frame.

• ALL Cargo Logistics (CMP 60.35): This mid-cap logistics counter could make bottom here at CMP 60 with strict SL placed at 55 we can expect a potential upside of 75.

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.

 

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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