Morning Outlook 22th September, 2022

NIFTY:

The NIFTY opened at 17766.35 with a gap down of 5O points. Prices initially went up and filled the gap quickly. However, the index did not sustain at higher levels and drifted downwards. Prices have recorded its intraday high at 17838.70, saw a sharp intraday decline of more than 150 points in the afternoon, and recorded its intraday low at 17663.60. The index found support there and bounced up. Prices have made some recovery and finally closed at 17718.35 near its opening tick with a loss of 97.90 points or 0.55% down. All the sectoral indices have seen a down move today and closed lower except FMCG which ended with a gain of 1.18%. METAL led the bears today by ending 2.09% lower followed by PHARMA, REALTY, and OIL GAS which lost more than 1%. The short-term trend is sideways, and the index is consolidating inside the 500 points range for almost one and half months. As mentioned yesterday, this is a contraction and a successful breakout from this consolidation may give us a directional move. Volatility is rising and we have been expecting it also due to the FED Policy announcement this week. Besides, the scheduled weekly expiry would add to the volatility. The INDIA VIX is now moving around 19 suggesting volatility is moderately high. As of now, we should avoid trading the index for the time being or prefer taking trades on an intraday basis only. We will get a trading opportunity soon.

BANK NIFTY:

The BANK NIFTY opened at 41282.60 with a gap down of 132 points. The index initially moved up but failed to sustain at higher levels and started drifting downwards after recording its intraday high at 41501.70. Prices have seen a sharp decline and recorded its intraday low at 40889.15. The index then recovered but formed a trading range towards the end of today’s trading session. Prices have finally closed at 41197.60 with a loss of 217 points. PVT and PSU BANKS both indices have performed almost the same today, saw a sharp decline, and closed lower by 0.83 % & 0.71% respectively. Within the index, in terms of points, AU BANK contributed the highest on the upside while INDUSIND BANK contributed the lowest. BANK NIFTY continued moving volatile and closed with a loss after two days of an up move. A gap down opening did not sustain but prices moved down again during the day. We have a support of around 40000 and resistance of around 42000 in the BANK Index. Prices have been moving within these levels for the last two weeks. We will get a trading opportunity once this range breaks one way or the other. Since we have a big news event coming this week which may raise volatility so we should now avoid trading the index. We should now wait for prices to break either support or resistance level.

TECHNICAL PICKS

DERIVATIVE PICKS

TOP DELIVERY PERCENTAGE

UPCOMING ECONOMIC DATA

NEWS UPDATES

• On Wednesday, benchmark indices broke two-day winning streak and ended lower with Nifty around 17,700 in the highly volatile session ahead of US Federal Reserve interest rate decision later tonight. At Close, the Sensex was down 262.96 points or 0.44% at 59,456.78, and the Nifty was down 98 points or 0.55% at 17,718.30. About 1251 shares have advanced, 2115 shares declined, and 117 shares are unchanged.

• The Cabinet on Wednesday approved a Rs 19,500-crore production linked incentive (PLI) scheme on ‘national programme on high efficiency solar PV modules’ with an aim to attract Rs 94,000 crore investment in the sector. One of the the benefits expected from the PLI scheme is that about 65,000 MW per annum manufacturing capacity of fully and partially integrated solar PV modules would be installed.

• Brokerage house Jefferies has kept buy rating on Zomato with a price target of Rs 100 per share. The investors are convinced on food delivery moat, with skepticism is high on quick commerce. The management bullish on quick commerce business & sees blinkit as a large driver of growth,

• The effect of the pandemic has hit global business in a manner that they have had to figure new ways to not just bounce back in some form but stay relevant as well. A key component of this piece is the supply chain, something that is the lifeline of any organisation. Paul F. Gruenwald, S&P Global Ratings’ Chief Economist, in a media interaction held in Mumbai, said “the supply chain has passed the efficiency test but failed on resilience.”

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

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