NIFTY
Pink is the colour of health; RED is the colour of bears. While the "Barbie" movie out shadows everywhere, bears rear their head in one of the strongest moves of recent times. From the long-term trend, this is a healthy correction for more sustainability. What everyone misses is, the last 15 Years annualised returns are 17-20% while the last two years are just single dight (Mid so far) based on the index. This is against the interest rate environment of lower to higher. The Micro-cap index prints near 40% since the return of bulls in March clearly profit taking is an easy option. China issues once again rear, US data continues to print elevated inflation despite decent, Europe is once again at the risk of higher inflation as the energy prices are on the ascent. What is interesting this time, rise of USD and fall of yields if they both move, a sure sign of risk off. The only missing piece is the JPY appreciation. That has long been delinked in these new dynamics of delink. A total review of Index Stocks and the FnO stocks reveal reds have opened up, while greens have moved to consolidation, though still lots of green places to hide. Broader market, with Audit firm news on the conglomerate needs to be watched. This can be anything but positive. On the Weekly (the Left side of the template), prints the 3 Crows pattern. Filled the last bull gap, now moving to the next gap and the 50% of the large bull candle when we printed massive 530 points in a week in late June. Clearly August stands by its word of volatility. On the Right side of the graph is much smaller frames, we go with shorts stops starts from 19480-19530-19580-19630, profits start from 19230-19060-18950-18880. These stops and profit taking are characteristic of conservative, moderate and aggressive, and hence one has to manage either size or the stop. Barbie colour should not end in barbeque, for the bulls if there is steep fall or to the bears if the swift reversal unfolds (probability at this stage reasonably low) for the day.
NIFTYBANK
FTX Founder, Sam bankman Fried, sent to jail on tampering with evidence. Country Gardens in China on brink of insolvency. US tries to restrict investment into China (positive for us?). This space has already fallen a lot despite the underlying positive sentiment. However, HDFC bank statement that increasing cost (which is nothing new when mergers unfold, same thing witnessed in ICICI Bank merger, though these are long term positives), can pull since it is heavy weight. Post MPC the CRR is still lingering, markets have not resolved one way or the other. While the major Index is showing winks of further fall, aided by the local cues and worries and the empirical evidence of Volatile summer and august, the going is rough than tough. On the Left side of the graph, each time we hit the new high we are followed by corrective moves. The upside are near 30% followed by 10% fall, then the subsequent two are near 20% followed by 12% fall this time it can move closer to 8-10 percent. Mark, the visibility of profitability incrementally more clearer than before hence, the fall is measured. Clearly 44200 ideally should be abuy zone, but that is not the case, as the broader market can propel further lower. Looks we are either into new range of 43800-44800 or 43600-44600 kind of place. Prefer buying those dips 43800 stop 43550 for 44300. Alternatively, selling one week puts when this area hits or the calls when the upper area hits looks to be better alternatives. With Tom holiday expiry is pushed today the Finnifty. Weak areas, HDFC, ICICI, SBI while strong are the PSU counters. Hedge appropriately remains the better option in these times.