NIFTY
The lines sum like this from one of the popular movie teaser that released yesterday #Devara
"You never touch the sea, You never play with me"
"I will never show you mercy, I will never let you be" ...............
Socio economics is such a powerful contemporary insight that throws interesting inputs.
The tale is about the controversy surrounding the sea, hopefully the division and diversion settles for the good!, the tales also surround be it the farmers strike in Europe, or the Controversy in US surrounding the popular celebrities be it politician or otherwise. But who cares is the current mood. Red Sea was the start.
More interesting is the Tail, the FED futures and the expectations deviate and yesterday\s market movement post some of the FED comments push markets expecting whopping 175 bps by 2025, while the first cut may not materialise before the first half is another take.
This week inflation data in US as well as ours matter a lot to the market as they are the first to in this year.
While the cues are green to hit the century, interesting to see and in fact a test to our markets if they can be sustained. There are reasons are not driven by the clues. Many spaces look tired. The only positive factor is we did not close below 21480. The large bear candle of yesterday that is almost four-day engulfing candle remains the hurdle to the bulls.
Add to that the weekly in the PIP, (too early to conclude though), showing tendency to print the evening star. With many spaces looking for a neutral to negative, overbought conditions continuing the cap, a sell on rally remains a better while the low of 21480 to be guarded.
For the day the open gap (fading is popular profession tool, need to be handled with care). Rise towards 21600 stops 21680 for move below 21500 is what is better RR. Stay optimum on turns is always the mantra of the trader. When both the size and direction go wrong it is sure to take bigger toll. Trade the probability, guard the possibility that is possible on by Risk Management.
NIFTYBANK:
It was an disappointment to see this Index falling through the support and closing at the low, minor wick at the support line drawn from the previous lows.
The markets look green, the question one has to ask is the damage already dun, if yes then the failure around the dotted line assume significance on any rise. This circules around the 47800-900 clearly the previous support now may act as resistance.
With Investment drive be it various states are the Vibrant Gujarat, Government spending is the real driver while the private consumption is taking a slower decent, this clearly flagged as fiscal activism. We clearly drawn this part of the global economic landscape, monetary and fiscal divergence will have to lead something to break to get it re-set. The longer the time it takes the greater the damage. For now all is well.
The PIP graph is of that of HDFC bank, has it broken the H n S, if the market cues are green will it bounce back above that. This can provide initial cues, and thus 1680 close remains vital to note. Any failure below yesterday lows, potentially can take this index down.
Core inflation remains near stubborn, today Japan Data confirms that too. While recent MoM is on the mend. Later in the week US inflation and our own, markets have near discounted them.
For the day 47800-900 remains a place to watch and reluctant shorts than longs with quick stops 48150. A close below 47600 after a higher open is again a negative tone for the day.