NIFTY
Started with a gap, with short covering. The energy that the bulls carried lead by the heavy weight RIL remarkable, bears get slaughtered, and has left nothing on the table with close being near the high.
The horizontal line (marked as RED) worked well, the large Bullish Maribozu seals any bear hopes save a close if and if any below the 21530 which is far away.
The dropping yellow line drawn from the ATH acts as the support line, helped by the similar colour upward line. A close today above 21830 seals, looks we are set for ATH before another meaningful corrective move. Suffice to say these corrections that we have witnessed in Jan so far are actually healthy in the longer run that a no corrective one way move which we are witnessing in many individual spaces.
The entire January move so far is just 6 points. We have two trading day’s to make anything meaningful.
Markets ignoring the geo-political news, toned down expectation of rate cut, softer economic data. FOMC tomorrow remains crucial, and markets have moved ahead of the event. Results season still on going, the earnings suggesting a softer landing if not hard landing.
Comments from Central Banker’s from Singapore to Swiss (Jordon comments that inflation to come below 2% in 2024), Europe more less factoring near 150 bps cut this year are points of support to the risk on moves.
Political developments one of the large states looks a cue to take higher, and more or less sealed the outcome of the 2024 elections (political risk being diminishing to negligible), pushes the large conglomerates Adani and Ambani companies to the north. The internals are 1:2 in favour of bulls.
The new range once moves higher than lower 21650-21850 ahead of FOMC, buy dips looks the approach than sell higher.
NIFTYBANK
Broader market strokes helped this space, while market participants disappointed with the moves in HDFCBANK. PSU banks continue their work as if nothing ever happened. PNB remains the new darling.
Of all the sectoral indices, this one and Finance looks on the back-foot in the current very short term apart from the FMCG pack.
Ahead of FOMC and Our own budget it is likely slow and steady higher base than a vertical move up. 45200-46200 is the new range.
EURO Zone inflation, US house price Index, Tom ADP, today JOLTS data before the FOMC moves. It is the first live move from the FOMC this year. Empirically studies still scare as the start of the rate cuts are the start of the recession trends. This time is different is the assumption once again.
MAG7 story continues, FOMO at the high particularly with the Hedge Funds and Fund Managers, while the retail segment is able to churn much higher returns. Something might give in to something else.
For the day 45350-45850 should work.