NIFTY
It is nearly a month of absence from writing, markets continue to do what the charts dictate.
The divergence that continued to appear in various spaces finally started yielding, we printed the evening star (marked by the arrow). We are almost flat for the year save 300 points on the nifty, not absorbing the nominal returns forget about the costs of buying.
The damage is more in the small and mid-caps. While the headlines and narratives say SIP continue to hit highs, the rush for the ownership has limitations, too much of anything is injurious to the markets. While bear markets have often moved in V shape (not a mandatory, if one does not know ask Japanese investors).
With Elections on the cards, there is little incentive for the markets or the fund managers to aggressively push one way or the other, save the year end targets that is churned and shunned.
Asian Central Bankers in action, move over the west welcome the east. BOJ decision later in the day assumes greater significance, NIKKI publishes end of the low interest rates, one has to wait and see the details. Then comes the RBA Rate decision.
China without much of the fiscal moves improved some of the economic numbers, the currency gets some realignment. We don't see too many calls or expectations of rate cuts. Select commodities are on their zone of confidence.
Gold and Silver move out of the recent ranges, while they try and penetrate for further gains. Crude is all set to spoil the party. Willingness for cuts, attacks on Russian spaces, (call for Putin peace moves gets unnoticed), less gloomy economic landscape are all the reasons.
US Housing starts, Europe sentiment index, Canada Inflation are the focus in Europe and US sessions. The Yield continue to elevate, ahead of FOMC there is little to expect than the pressers.
For our Index, 21230 holds while 20850 attracts, break of to dictate, bears hold the edge than the bulls, a direct attack below 21900 on hourly close basis pushes the space towards the 21500 area. Short below 21230 above that wait for the ability to close.
NIFTYBANK
Nifty bank back to where it was a month ago, negative for the year so far.
Optically nothing much has changed, we printed out of the box GDP number, higher GST collections, robust SIP numbers. One cannot blame the PSU pack as their weightage is not that great.
Broader profit taking can be the culprit. With inflation assumed to be slowing down, the real print would come post the elections not before. The measures are meant to contain as administrative and thus the markets are not focussing. In any case, the larger picture suggests a better management.
With Bank of Japan, communicating the end of the low interest rate regime, it is clear, monetary policy would continue to be elevated. What one has to wait and see is how the liquidity will be drained by the central Bank's and that would take some more time and the devil is in detail.
Seven Days of Fall and the lower wick of yesterday coming around the LBB and previous move supports a rise first than fall first. This is also aided by the neutrality of the oscillators.
Close above 47000 pushes some hope while bears need below 46000 to assert. Recall this has been very strong support and hence this space likely to get some support. Near term frames 46300-47300 to work.