Morning Outlook 26th May, 2022

NIFTY:

Nifty opened at 16196.35 with a gap up of 71 points. The index moved further on the upside, then saw a minor correction, and then again moved up to record its intraday high at 16223.35. Prices have faced strong resistance there and then started moving on the downside. The decline continued for almost the whole day and prices have recorded its intraday low at 16006.95. The index spends the second half moving sideways and saw multiple moves in both directions. The index finally closed at 16025.80 w it h a loss of 99.35 points or 0.62% down. The Financials have out performed today and closed with a gain of more than half a percent. The IT sector has underperformed today and closed lower by more than 3%.

So, this range may continue for a couple of weeks. The volatility is very high as the volatility index ‘INDIA VIX’ is moving above 25 levels. For stable volatility, it needs to come around 15 – 18 levels. The summary here is we should avoid trading the index and wait for an adequate setup to emerge.

BANK NIFTY:

Bank Nifty opened at 34491.80 with a gap up of 186 points. The index rallied further, saw a minor correction, and then again moved up to record its intraday high at 34722.60. Prices have found strong resistance there and turned down. The index erases all the gains, recorded its intraday low at 34285.80, and finally closed at 34313.90 without much of a change. PSU BANKS have underperformed today and ended lower by 2.03%.PVT BANKS have outperformed today and closed higher by 0.27%. Within the index, in terms of points, ICIC IBANK contributed the highest on the upside while SBIN contributed the lowest.

Tomorrow, we should look for a buying opportunity on a breakout above 34800. But if the index moved down then we should sell short on a breakdown below 34100.Keep a stop of 300 points and a target of 800 points from your entry price.

TECHNICAL PICKS

DERIVATIVE PICKS

Top Delivery Percentage

UPCOMING ECONOMIC DATA

NEWS UPDATES

• The Cabinet Committee on Economic Affairs (CCEA) has approved the sale of its remaining 29.5 per cent stake in Hindustan Zinc Ltd (HZL) as the centre looks to accelerate its disinvestment drive with some key privatisation proposals hitting hurdles. The sale of the entire 29.5 per cent stake in HZL would fetch the centre about Rs 38,560 crore at current share market price.

• InterGlobe Aviation, which operates flights under IndiGo brand, on Wednesday reported that its consolidated loss widened to Rs 1,682 crore for the quarter ending March 31, 2022 as higher fuel costs more than offset a rebound in demand for air travel. It reported consolidated loss of Rs 1,147 crore in the year-ago period when a raging pandemic kept people at home. The company’s consolidated revenue from operations rose 29% to Rs 8,021 crore in Q4FY22 as against Rs 6,223 in Q4FY21.

• Oil rose after a two-day decline as an industry report showed US gasoline stockpiles shrunk further ahead of the summer driving season and Saudi Arabia said there’s nothing more it can do to tame the market. West Texas Intermediate futures traded near $111 a barrel.

• Shares of information technology firms fell after Nomura downgraded five stocks in its coverage, citing sooner-than-expected growth slowdown. The brokerage downgraded Tata Consultancy Services Ltd. and L&T Infotech Ltd. from ‘neutral’ to ‘reduce’; Wipro Ltd., HCL Technologies Ltd. and Persistent Systems Ltd. from ‘buy’ to ‘neutral’ based on valuations, it said in a May 24 note.

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

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