NIFTY
One of the pitfalls of not enduring the history or contemporary socio-economic conditions is the dependency on what one believes it worked. Blame it on recency bias.
Hardly three weeks back, the who's who of the Financial World pushed the rinse repeat narrative, dollar fall, larger rate cuts, higher equity and no recession.
They all looked casual in the first notice, fetched, forwarded, circulated, now recycled bin! We did prepare our 2024 macro ask me for the copy. There were hard hitting truths.
Now the bricks are falling one by one, first dollar has one of the best fight backs to the move, now flirting with the 200 DMA, in fact our popular one is not 200 but 233 DMA.
Then comes the larger rate cuts, by all counts they are more measured than what the market expects, listen to the Davo's speeches of the top CEO's not the arm chaired, pull print and paste reports.
Higher equity, if you notice the above two, the major reason for the markets to move is simply the expectation of larger rate cuts, if that premise is taken out either slowly or casually, then you would find no water in the pool to swim against. That simply blunts a peaceful negotiation between the bulls and bears. Volatility is here to stay.
No recession, this too shall pass, the 2/10 is inverted, a soft landing or hard landing. The Governments all over are printing money and that is keeping the economy up. China refused to budge this process, listen to their Premier Speach, without stimulus they print 5.3% GDP. Don't look at their equity market and measure. Few understand China, there are no exceptions.
Iran India led firing in Pakistan? one more to the bears to latch on? Red Sea, Overbought conditions, highly leveraged positions, Negative is Negative. 21124 can be a devotional number, but if prayers are the only thing left, it is time to sell.
Gap down by the clues, gap filling around 20930, week close below 21830 prints one of the bearish patterns, another three days left. For the day 22050 caps while 21880-830 attracts, sell on the rally remains the approach.
NIFTYBANK
Bulls carry the Ouch, bears the fitch. Clearly the new "ITC" in town is the HDFC.
You like HDFC, but HDFC is not liking you. You can count on it, but it won't count on you. Its time is yet to come, but for sure it will come!
Results come, clues from ADR suggests a fall. The fall if any, will frustrate the new buyers. Simply there are many places than this one at this point of time.
Fitch news is nothing new, markets wont focus on this one. Higher Yields in US, lower credit off take, higher government expenditure last quarter always about liquidity are the points that weigh on the market.
Failure around 48400-300 area, if we close below 47800 brings back the lower range than otherwise. Expectation of quick move past 48500 may have to be tempered for now. That is typically built in the Index.
US Empire State Manufacturing comes huge surprise, China Equity despite the stimulus fall further. Markets don't factor this stimulus as a direction but a band aid solution at this point of time.
Break of 47800 is the only trade that one can venture, but things can quickly flip. One needs a close to get into this trade. 47700-48400 are the ranges to focus.