Morning Outlook 14th September, 2022

NIFTY:

The NIFTY opened at 18044.45 with a gap up of 108 points. The index initially moved up but then started moving downwards and recorded its intraday low at 18015.45. Prices then bounced up sharply, saw an upside move, and faced a strong resistance near 18100. The index formed a narrow and tight trading range there. The index recorded its intraday high at 18088.30, continued sideways momentum till the end, and finally closed at 18070.05 near its daily highs with a gain of 133.70 or 0.75% up. METAL outperformed today and closed with a gain of 1.28% followed by FINANCIAL which ended almost 1% higher. REALY and 0IL GAS underperformed today and closed lower with a minor loss. The short-term trend is up and there is no doubt about it. For this week, our view was choppy and narrow. Prices have almost moved similarly in the past two days. Support is now visible around 17700 which was also a breakout for the current up move. Resistance should now emerge around 18350 – 18400 if this rally continued. The INDIA VIX, a benchmark index for volatility, has been moving below 18 consistently suggesting volatility is normal which should favour the bulls. We should look for a buying opportunity on a dip or intraday consolidation breakout.

BANK NIFTY:

The BANK NIFTY opened at 40802.10 with a gap up of 241 points. The index initially consolidated in a tight narrow range and recorded its intraday low at 40693.95. The consolidation resolved on the upside and prices have rallied to record its intraday high at 40904.30. The index finally closed at 40864.95 with a gain of 303 points. PVT BANKS have performed well today, saw an intraday rally, and closed withagainof0.80%. PSU BANKS have underperformed today and closed without much of a change. Within the index, in terms of points, HDFC BANK contributed the highest on the upside while IDFC FlRST BANK contributed the most. A gap-up opening was sustained today in the BANK NIFTY and prices have closed with some gains. However, the intraday range was narrow today as prices have moved within a range of just 211points. These narrow range days should lead prices to a sharp move one way or the other. For the current week, our view was narrow and choppy price action. So far, prices are moving as we expected. Support is visible around 39800 while resistance may emerge around 41000. The short-term trend is up. We should now look for a buying opportunity as far as prices are trading above the 39800 level.

TECHNICAL PICKS

DERIVATIVE PICKS

TOP DELIVERY PERCENTAGE

UPCOMING ECONOMIC DATA

NEWS UPDATES

• On Tuesday, Sensex ended the day 451.03 points higher at 60,566.16. Nifty gained 130.50 points to close above 18,000. About 1776 shares advanced, 1600 shares declined, and 101 shares were unchanged. Both indices ended at five-month highs. banking, FMCG, industrials, and metal stocks rose highest.

• The expectation of a 50 basis-point rate hike by the RBI has begun after India’s retail inflation touched 7% in August. The inflation print was a tad higher than economists’ estimates. It’s also the eighth straight month of breach of the Reserve Bank of India’s upper target of 6%. The RBI’s Monetary Policy Committee is scheduled to meet between Sept. 28 and 30.

• The Indian rupee gained as much as 0.6% against the U.S. dollar on Tuesday. The currency opened 0.3% higher over its previous close at 79.28. It had closed at 79.53 on Monday. During the day, the currency appreciated as much as 0.63% to 79.03 against the greenback, before paring some gains to end at 79.14.

• Investors are fleeing equities en masse amid the specter of a recession, with allocations to stocks at record lows and cash exposure at all-time highs, a Bank of America Corp. survey showed. Global stocks have had a roller-coaster ride in the past few months. Declines have been driven by fears that central banks will remain hawkish for longer and tip the economy into a recession, while rallies have been fueled by low investor positioning and optimism around peaking US inflation.

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

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