A lackluster start after a bad show the week before where Skilled ended with weekly falls of 0.44%. What does the chart indicate about its trajectory and what are the important levels for Nifty and Bank Nifty?
Markets witnessed choppy trading sessions last week and the benchmark Bank Nifty saved the day. A strong rebound in ICICI Bank, axle bench, SBI and HDFC Bank helped the benchmark indices recover from the week’s lows, with Nifty ending lower with a weekly decline of 0.44%, while Bank Nifty ended the week in the green, up 1.8% WoW. Most technical and derivatives indicators are pointing towards consolidation this week, and markets are likely to be further boosted by quarterly earnings, FII flows, geopolitics and global market sentiment.
As for Nifty, it has crucial support around the 24,500-24,600 zone, a sustained break below this level could trigger the next selling attack. While on the upside, immediate resistance is seen around the 25,200-25,300 area.
As far as Bank Nifty is concerned, support is seen around 51,200-51,300 zone, while resistance is around 52,500-52,700 zone. The good news is that with India’s VIX hovering around the 13 mark, investors seem to have taken the recent sell-off in stride. However, remaining cautious would not hurt at current levels.The earnings season does not seem to have excited the markets. What is your assessment of the results of the greats so far and the prospects for the rest of the season?
Overall, the earnings season so far has been mixed, with investors closely watching this week’s earnings reports, including heavyweights such as ICICI Bank, Hindustan Unilever, TIC, Bajaj Finance, Bajaj FinServ, Ultra-technological cement, India Coal, JSW SteelICICI Prudential, TVS Motorsto name a few.
Overall, expectations are that the recovery could be weak in the short term, but the medium and long-term outlook remains positive. Furthermore, many companies may find it difficult to match the expectations built up by investors, so markets are generally adopting a wait-and-see policy.
All the big IT companies have declared their results. Will this be on your radar? If so, what actions will you choose and for what objectives?
IT stocks had earlier witnessed a decent rally, with heavyweights like HCL Technologies, infosysTCS, Mahindra Technology and wiproThey are up between 10% and 25% year-to-date, clearly reflecting investor interest in the sector. However, subsequent fears of an impending recession in the US, reduced discretionary spending by companies in the US and Europe, along with technology layoffs in the US, increased investor anxiety. After the strong rally, we witnessed profit booking on many IT counters; However, investors looking to diversify their portfolio cannot ignore IT as a sector, so ideally a mix of large and mid-cap companies will be part of the portfolio.
What should investors do about consumer goods and autos, which have been the biggest laggards this week?
Both the Nifty FMCG and Nifty Auto indexes corrected by almost 7% in October, clearly indicating that both sectors witnessed profit booking on the back of a spectacular rally witnessed earlier in the year. Given the lukewarm expectations of both sectors in the current festival seasons, there is a massive sell-off by investors due to concerns about their future profits.
Also, sales projections of two-wheeler giant i.e. Bajaj Auto, weaker than expected for the festive season, adding to weakening investor sentiments, apart from the not so monthly sales data encouraging for the automotive sector, they also appear to have declined. investor expectations. Investors should look for buying opportunities in both sectors from a long-term perspective but at the same time be selective in their investment approach.
Motilal Oswal, Usha Martin and HPCL attracted attention with big rallies, while Manappuram Finance, DMart and Bajaj Auto were among the worst losers? What should investors do with them?
Motilal Oswal and Usha Martin hit all-time highs, ending the week with gains of 27% and 2% WoW, while HPCL gained almost 9%, trading slightly below its all-time highs. Investors are advised to book profits on all these counters because on one hand, the rally has been very steep in Motilal Oswal, while in case of Usha Martin and HPCL, both the stocks are trading near resistance zones.
On the losing front, Manappuram lost 18%, DMart lost 13% and Bajaj Auto lost almost 15% WoW, with investors losing substantially over the past week. At current levels, it would be unwise to exit unless recent lows are broken and prices remain below them. These stocks will most likely enter a consolidation zone for some time, until new triggers emerge for these stocks.
Therefore, investors can hold on to these stocks and should look for exit opportunities from any pullback in case they have a short-term outlook. For long-term investors with an investment horizon of 5-10 years, corrections can be used as opportunities to increase their positions in an equity SIP mode.
(Disclaimer: Recommendations, suggestions, views and opinions provided by experts are their own. They do not represent the views of Economic Times)
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