NIFTY
One more day, one more loss "of words". Since start of this year, bulls and bears share the honours, with turns and twists, that includes gap up and down, large candles, large wicks, you name it you got it.
Yesterday moves remain the icing on the cake. This stems from the larger negative cues, domestic volatile moves, VIX on the rise. One more time Gift Nifty cues are curse more than the Gift!
Political moves from Nitin shifting different parties to stay as is where is, memes floating instead of U turn, Nitish Turn. Markets continue to do that. Will that mean we have down day today? Nothing is assured, today being an expiry day, anything is possible.
The reason for the sharp up move is our WPI numbers that comes negative, which shook the NIFTYBANK and then lifts the entire boat.
Global markets also recover, Japan data this morning is softer, inflation numbers from UK also comes on the slower path. In addition, comments from FED officials one data should not lead any one to conclude, markets latch this as acceptance that inflation remains on the slippery path.
However, dollar and yields remain elevated.
The PIP graph is intra-day just near the dropping trend line. Ideally, the follow through action is higher that can push closer to 22000 handle. Question is will we print that and fall next or we stay higher and longer. The only clear print so far is the base around the 21500 that looks stronger than anything else. Resistance may come and go, base remains.
Neutrality best describes where we are now, hence one needs to see how we negotiate today or more closely this week. Yesterday, move takes sheen about the extreme downside scope.
Intra-day 21780-21950 should be decent enough to negotiate, daily close below 21730 if any, brings caution to the table.
NIFTYBANK
It was preparation to exit the longs, it looked as if the end of the bull run. We borrowed enough on the already brittle confidence about inflation.
Cinematic events push U turn, those who left unwinding rued, those who were holding also rued, those who sat all through did not have any opinions that sums up the plot, otherwise an RED slotter for both bulls and bears.
For those who were looking for reasons, let me put the fundamental or the economic reasons first.
I
1. The inflation numbers, namely WPI FOOD INDEX YOY comes lower at 3.79%. This is the main trigger of the three numbers. First in the last two months this number printed above the 5% points while this time it comes below the 4%. Our Yields fall 4 bps but end just 2 bps.
2. The next Index is WPI Inflation wholesale prices that comes at 0.27%. For the readers this Index was negative -0.79% last year and went down as negative as -4.18%, as volatile as one can expect. It is above 0, but comforting to read.
3. WPI Manufacturing inflation (what the causes, lack of demand? over supply?) that comes at -1.13%. This has been on the negative throughout last year and has resumed it's downward journey. Good or bad one has to wait and see.
By the way, anyone found Consumer Price inflation, or the prices falling when they spend? that is the absent across the world.
II Now comes the Technical.
1. The pip graph shows the Inverse Head and Shoulders the clearly pushed the needle higher. Similar pattern can be seen in some graphs like Kotak Mahindra Bank.
2. The bigger picture, we have Morning Star pattern.
To sum, NIFTYBANK appears bottomed and that in itself is good news to the NIFTY. We now carve the new base as 45500 while that holds move to 46400 to be the aim. Any fall below 45300 frustrates.