Morning Outlook 11th May, 2022

NIFTY:

Nifty opened at 16248.90 with a gap down of 53 points. The index initially moved up but turned down quickly. Another rally started after the index found support around the opening tick. Prices have strongly bounced up around 16250 and then rallied almost 150 points to record its intraday high at 16404.55. The index found strong resistance there and turned down. Prices moved very narrow and choppy then but saw a sharp decline in the last hour of trading. The index finally closed at 16240.05 near its opening tick with a loss of 61.80 points or 0.38% down.

The short-term trend is down. as prices are making a bearish pattern of lower highs and lower lows. Volatility persists and rises as well. INDIA VIX, the volatility’s benchmark indices have risen to 22 levels. For a non-volatile environment, this needs to come around 15 -18 zone. Trading in such a volatile environment almost always leaves us with a lot of whipsaws. We need to wait for the volatility to subsidize first.

BANK NIFTY:

Bank Nifty opened at 34181.20 wit h a gap down of 140 points. The index recorded its intraday low at 34176.80 within the first five minutes of trading and then went up. A rally brought prices to its intraday high at 34781.80 and then finds strong resistance there. The index has seen a sharp decline in the last hour of trading and finally closed at 34418.20 wit h a gain of just 97 points. PSU BANKS have underperformed today and closed lower by 0.79%. PVT BANKS have outperformed today and ended wit h a gain of 0.75%. Within the index, in terms of points, HDFC BANK contributed the highest while AXIS BANK contributed the lowest.

It was a volatile day today where bulls were in a control for almost the whole day but bears came in the end and brought prices to yesterday’s closing price. We may see a process of consolidation or even a relief rally here. As of now, we do not have an adequate trading setup that could suggest us a trading opportunity. We are recommending traders step aside and avoid trading the index for the next few trading days.

TECHNICAL PICKS

DERIVATIVE PICKS

UPCOMING ECONOMIC DATA

NEWS UPDATES

• Ahmedabad-based Cera Sanitaryware Limited is set to expand its sanitaryware and faucetware manufacturing capacity in two phases for a capital expenditure (capex) of nearly Rs 200 crore. The Board of Directors on Tuesday approved the capex of around Rs 197 crore for the company’s expansion plans including a greenfield sanitaryware plant and a brownfield faucetware unit. Currently, Cera Sanitaryware Ltd. has a sanitaryware capacity of 2.5 million pieces per annum (mppa) and faucetware capacity of 3 mmpa. The company informed exchanges that the existing capacity utilisation is close to 90-100 per cent.
• Asian Paints’ consolidated net profit fell marginally to Rs 850.42 crore in Q4FY22 as compared to year-ago period. Revenue from operations increased 18.66% to Rs 7,892.67 crore. Consolidated sales increased 20.6% to Rs 7,890 crore in Q4FY22 over Q4FY21, the company said on Tuesday.
• Tyre major MRF Ltd on Tuesday reported a 50.26 per cent decline in consolidated profit from continuing operations to Rs 165.21 crore for the fourth quarter ended March 2022, hit by higher expenses, especially raw materials. The company had posted a consolidated profit from continuing operations at Rs 332.15 crore in the same period of the previous fiscal, MRF Ltd said in a regulatory filing. The consolidated revenue from operations in the fourth quarter was Rs 5,304.82 crore against Rs 4,816.46 crore a year ago, it added.
• Cement maker Dalmia Bharat has reported 6.10 per cent decline in consolidated net profit at Rs 600 crore for the fourth quarter ended March 2022. It had clocked a net profit of Rs 639 crore in the year-ago period, Dalmia Bharat said in a regulatory filing.

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

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