Morning Outlook 20th May, 2022

NIFTY:

Nifty opened at 15917.40 with a big gap down of 323 points. The index initially consolidated after recording its intraday high at 15984.75 in its initial trades. The consolidation sooner breaks on the downside and prices have seen a sharp decline. On the downside, the index added almost 150 points to record its intraday low at 15775.20.Prices have seen a minor recovery in the last 30 minutes of trading and finally closed at 15809.40 with a loss of 430.90 points or 2.65% down. All the sectoral indices have seen a decline today and closed lower led by the IT and METAL which ended 5.74% & 4.08% lower respectively. FMCG ended with a loss of 0.65% and the rest of the sectoral indices have registered a loss of more than 2%.

We should now wait and see if this support level is holding or not. If it holds then we will be looking for buying and if it breaks then we will be looking for a shorting opportunity. The volatility is very high as the volatility index ‘INDIA VIX’ has risen today to 25 levels. For normal volatility, it needs to come around 15 – 18 levels. The summary here is we should avoid trading the index.

BANK NIFTY:

Bank Nifty opened 33461 with a gap down of 737 points. The index recorded its intraday high at 33633.95 and moved further on the downside. Prices then saw a minor rally that fizzled out quickly and the index again moved down to record its intraday low at 33180.60. Prices have seen some recovery in the last 30 minutes of trading and finally closed at 33359 with a loss of 839 points. PSU and PVT BANKS both have performed almost the same today, saw a sharp intraday decline, and closed lower by 2.73% & 2.72% respectively. Within the index, in terms of points, ICIC IBANK contributed the highest on the downside followed by the HDFC BANK.

We took a long trade of around 34000 and for today, we have suggested staying long with a stop at 33950 and a target at 34800. Unfortunately for us, the index opened with a gap down below our stop loss and we exited.

TECHNICAL PICKS

DERIVATIVE PICKS

Top Delivery Percentage

UPCOMING ECONOMIC DATA

NEWS UPDATES

• Indonesia will lift its palm oil export ban from Monday, following improvements in the domestic cooking oil supply situation, President Joko Widodo said on Thursday. The world’s top palm oil exporter has since April 28 halted shipments of crude palm oil (CPO) and some derivative products to try to tame soaring prices of domestic cooking oil.
• Maruti Suzuki India (MSI) on Thursday said its new manufacturing facility in Haryana, the company’s third in the state, would reach peak production capacity of 10 lakh units per annum in the next eight years entailing a total investment of Rs 18,000 crore. The new facility, which would come at a 800-acre site at IMT Kharkhoda in Sonipat district, will entail total investment of Rs 11,000 crore in the first phase with a production capacity of 2.5 lakh units per annum.
• ONGC is weighing the options of placing more bids for Western companies’ stakes in multiple Russian oil and gas fields even as its first bid for Shell’s 50% stake in Salym fields in Siberia has not been accepted, people familiar with the matter said. The company is evaluating the option to bid for Shell’s 27.5% interest in the Sakhalin-II oil and gas project and ExxonMobil’s 30% stake in the Sakhalin-I project, looking to acquire energy assets cheap as western oil companies exit Russia in the wake of the Ukraine invasion.
• Gautam Adani’s company, Adani Enterprises Limited, has forayed into healthcare services through its wholly-owned subsidiary Adani Health Ventures Limited. The subsidiary includes setting up, running, administering medical and diagnostic facilities, health aids, health tech based facilities, research centers and basic healthcare facilities.

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

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