Retro Gravity! Fall of Apple
Two Ends, One Path!
NIFTY
Two events, inference and action similar. Chandrayan3 moves into Moon Orbit, the gravitation of Moon is 1/3 of earth in that sense retro gravity. "MOX, ISTRAC the centre, expression of I am feeling lunar gravity is the curious statements to observe. Other side, Apple results disappoint on the sales and fall breaking the trendline. US data came stronger, Dow initially moved higher 250 points then back down on “no recession” comments. In other words, goodness is bad news reverting back? Friday action pushes bull on hopes bears on edge. The clues in green this morning once again brings bulls expectations of positive day. The big picture shows market is still in corrective mode. We are so far hardly five trading days, but gave up 50% of the July gains that is the bull's worry. In the intra-day we have formed inverse head and shoulder and poses potential for another 100 plus points. This week is crucial in many respects, apart from corporate results we have our own MPC, US inflation data eyed. SnP showing slight bearish connotation than the Dow that needs to be watched. Empirically August is volatile month, may not be any different. The start remains green, but then one has to wait and watch how it pans. Bigger frames show 19450-19650 range, near term 19480-19630 as ideally better range. Any direct break below 19450 warns of deeper move. Daily close below 19300 propels to the 188800 story. On the individual parts, there is not much to offer to either side, hence one more week of range is most preferred one.
BANKNIFTY
US data comes stronger, US equity moves stronger, the news reports suggest market fell post the JP Morgan scrapping their forecast for recession in 2023, but risk of downtrend or sub-par growth still in place. Jefferies, still expect recession but are looking in Q1 2024 pushing and fishing out any chances of rate cuts in 2023. In a sense two ends, same path. On similar lines, SBI comes out with good numbers, beats, but look markets have chosen the negative part of the number and punishes. Both good and bad numbers meet the same fate. The slow and impactful headline story, or the story the second half will play out will surely be liquidity and cost of liquidity. the US M2 to nominal GDP ratio is 4.3% above the pre-covid trend, down from 7.2% in Q1 23 and down 27% from Covid peak, that is huge, any move below the trend is restrictive policy and would surely impact the asset prices. We have our own bucket full of worries, with wheat being another commodity reducing imports, and pulses on the import list, while the ban on lap, tops grabbing the headlines. It is always how we react and resolve than the actual impact that market focusses on. MPC comments would be key to watch. While we talk on the inverse head and shoulder on the nifty there is potential for H n S in the BANKNIFTY, too early as the underlying trend here is bullish and HnS pattern can turn into continuation pattern also. The past two days action more so the Friday one, despite SBI pulling down, sent some base building around the 44400 area. A daily break 45400 is needed to bring the bulls back on strong footing. This clearly marks the path for to follow 44400-45400 as the range. Respect this range, potentially market should resolve one way or the other this week.