The NSE NIFTY 50 index began the previous week with a positive record and then approached near our target in 17500. As a result, the weekly price action forms a bull candle that brought higher higher, showing the continuation of positive bias. We repeat our positive attitude and finally hope that Nifty goes to 17900 in the coming weeks because 80% of Retracement from all declines from October 2021 to June (18600-15200). Thus, every temporary breath in the future of the cut that will not be interpreted as negative instead of the purchase strategy at DIPS must remain focused because we do not expect index to violate the main support of 16900.
A) Details of the price of Brent crude oil below $ 98 increase sentiment and must help reduce inflation fears, which are positive for equity
B) The extent of the market measured by the percentage of shares that rise above an average of 50 days has experienced an extraordinary increase, with the current reading of 86% on the reading mid-July by 44% which shows the expansion of cross-sectoral participation and market capitalization
C) In the developed market space, the S&P 500 has risen from the main support, after a correction of 24% of the highest life. Since 2008, in three main examples, after the average correction of 25% S & P500 has formed a durable lower part and rose back to the highest. We expect a positive historical correlation from Indian equity with DM playing forward
D) In a developing market space, Indian equity relatively outperforms the MSCI EM basket significantly. With FII who changed clean buyers in Indian equity over the past few weeks, we hope that this better performance will further improve
At the front of the sectoral, IT, BFSI which contributes around 50% of the weight in the index is expected to lead with strong support from automatic, pharmacy and consumption. The choice of big hats that we like is HDFC Bank, HDFC, Infosys, Tata Motors, Bharti Airtel, Cipla, Tata Steel, Titan Company, while in Midcaps we like Astral Polytechnik, Canara Bank, Havells, Tata Elxsi, Brigade Enterprises, KSB Pumps Material Chemistry, JK Lakshmi Cement, Tata Chemical, Trent.
Structurally, higher high-low formation supported by broader market participation makes us confident to revise the support base in 16900 because 50% of the retracement of its latest rally (16438-17407) coincides with the positive gap seen on 29 July, 2022 (16930-17018).The MIDCAP index relatively outperformed the benchmarks supported by an increase in market area, showing broad -based rally nature. In the future, we hope that the chasing activity must be seen in the small hat.
Outlook Bank Nifty
Bank Nifty over the week was traded in the range with positive bias to close higher for the third week in a row in the middle of lower crude oil prices, the results of softening and profitable global cues. The index closed at the level of 37920 increased by 1.1%. The weekly price action forms a bull candle that maintains a high signal that is higher than the up step. We hope that the index maintains positive bias and heading to February 2022 height from 39400 levels in the coming weeks. Every temporary breath in the future of the future that will not be interpreted as negative must be used as a chance to purchase. The 18% sharp rally index in just seven weeks has approached the overbought condition in the daily and weekly stochastic oscillator (currently placed at 81 and 95, each) which shows the possibility of temporary breathing at a higher level cannot be ruled out. We believe that every retracement from this new up step from here will make the market healthy and offer additional purchases. Bank Nifty relatively outperformed the benchmark index during the market correction and the next resignation as can be seen in the graph of the Nifty/Nifty Bank ratio. This has registered an escape on a high supply path since January 2021 highlighted the strength and continuation of better performance.