Morning Outlook 12th May, 2022

NIFTY:

Nifty opened at 16270.05 with a gap up of just 30 points. The index inched further higher in its initial trades and recorded its intraday high at 16318.75 within the first 15 minutes of trading. Prices have found strong resistance there and started drifting downwards. The index erases all the gains, filled the gap, and recorded its intraday low  at 15992.60 a few ticks below 16000.Prices have seen a sharp rally of more than 200 points towards the end of today’s trading session and finally closed at 16167.10 with a loss of 72.95 points or 0.45% down. BANK, FINANCIAL, and REALTY outperformed today and closed wit h gains. META L and OIL GAS ended on a flat note. The IT led the bears today and ended with more than a 1% loss.

It’s been more than 6 months and we can clearly see a bearish pattern of lower high and lower low. The distribution will end if NIFTY did not go below the previous swing low at 15671.45 VOLATILITY is also very high as the INOIA V IX again rose today. Support is now visible around 16000 while resistance may emerge inside 16400 -16500 zones. We should avoid trading the index and wait for a clear sense of direction.

BANK NIFTY:

Bank Nifty opened at 34691.50 with a gap up of 273 points. The index initially moved lower, filled the gap, and moved further lower to record its intraday low at 34143.20.The index found support there and bounced up. A rally brought prices to its intraday high at 34793.20 and the in finally closed at 34716.25 with a gain of 298 points. PSU BANKS have underperformed today and closed lower by 0.53%. PVT BANKS have outperformed today and ended wit h a gain of 0.5 3%. Within index, in terms of points, AX IS BANK contributed the highest while FEDERAL BANK contributed the lowest. The index is outperforming the whole market for the past few trading days. Tomorrow is the weekly F&O Expiry Day so we can assume that the ongoing high volatility should continue tomorrow also. A trading opportunity shot emerge after tomorrow or in the next week. Till then avoid trading the index.

TECHNICAL PICKS

DERIVATIVE PICKS

Top Delivery Percentage

UPCOMING ECONOMIC DATA

NEWS UPDATES

• The capital expenditure of tyre makers is expected to increase to around Rs 5,000 crore this fiscal on the back of improving demand, as against around Rs 3,700 crore annually in the preceding two fiscals, according to a CRISIL report. The demand is likely to be driven by segments such as replacement, commercial and passenger vehicles (CVs and PVs), along with exports, the credit ratings agency said, adding that credit profiles of tyre makers are expected to remain “stable”.
• Tata Motors on Wednesday expanded its electric vehicle range in the country with the launch of Nexon EV MAX, priced between Rs 17.74-19.24 lakh (ex-showroom). Equipped with a 40.5 kWh lithium-ion battery pack, the Nexon EV Max offers 33 per cent higher battery capacity than the Nexon EV, delivering ARAI certified range of 437 km (under standard testing conditions), ensuring uninterrupted inter-city travel. ARAI refers to Automotive Research Association of India.
• Aditya Birla group’s Novelis today announced it will invest $2.5 billion to build a new low-carbon recycling and rolling plant in Bay Minette, Alabama, USA. The highly advanced facility by Hindalco subsidiary will have an initial 600 kilotonnes of finished aluminum goods capacity per year.
• Morgan Stanley has lowered its forecasts for India’s economic growth in the next two fiscal years, saying a global slowdown, surging oil prices and weak domestic demand would take a toll on Asia’s third-largest economy. Gross domestic product growth will be 7.6% for fiscal 2023 and 6.7% for fiscal 2024, 30 basis points lower than the previous estimates, the brokerage said in a note dated Tuesday.

Source: Economic Times,  Indian Express  ,Business Today, Livemint, Business Standard, Bloomberg Quint

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