Anuj Singhal, Managing Editor of CNBC-Awaaz Says that there is another counter trend move going on in the market. The major trend of the market is of decline. Yesterday’s rise was mostly due to short covering. FIIs sold `5,463 Cr in cash yesterday. FIIs also covered shorts in indices and stocks yesterday. FIIs bought `718 Cr in index futures while FIIs bought `2122 Cr in stocks futures. FIIs’ net short in index futures decreased by 22000 contracts. Once again, one can test the 10 and 20 DEMA in the index.
Important technical levels of Nifty
Important technical levels of Nifty Bank
Anuj Singhal said that to change the big trend, Nifty needs to close above 20 DEMA. Nifty needs to close above the daily peak and 20 DEMA for 3-4 days. Unless this happens, the risk of failure of every rally is very high.
Market: What are the signals?
Brent crude continues to fall, slipping below $78/barrel. The picture of results still does not look strong. FIIs continued selling in cash but also did some covering in futures. The market is getting a little nervous before the budget. If there is no major negative in the budget, the market may rally. The market is going into the budget with very low expectations. The market is not going into the budget with a pre-budget rally but with selling. If the government makes a big announcement on capex in the budget, the market will run. All the government has to do is not increase taxes and spend more on capex. The economy is slowing down and companies’ results show it. Ultimately, no market can survive without earnings support.
Nifty: How to know if the trend has changed?
Anuj Singhal said that the current phase looks exactly like Oct 2021-June 2022. Nifty had fallen 15% between Oct 2021-June 2022. The correction from Oct 2021-June 2022 lasted for 7 months. The current correction reached in the fourth month. The overcorrection ends with a big drop on bad news. Another way is to do short covering in the market with cash purchases. Corrections mostly end in phases when stocks stop falling even on bad news. This is a good chance that the correction will end with the current Earnings Season.
Anuj Singhal said that if the budget is good then the results may improve from Q1 FY26. It is also possible that green shoots may start appearing from the Q4FY25 results itself. Till then stay in the market with stocks of relative strength. Many shares are hitting life highs in this market also.
strategy on nifty
Anuj Singhal said that the first support of Nifty is at 23,050-23,150 while the most important support is at: 22,970-22,980 (recent low). The first resistance is at 23,275 (10 DEMA) while the major resistance is at 23,475 (20 DEMA). If 23,275 fails, go short, set strict SL of 23,350. If 23,150 hinges then go long, put a strict SL of 23,050. Be prepared to take trades both ways.
strategy on nifty bank
It is still better to stay away from Nifty Bank. Take any trade in Nifty Bank with SL of 500-800 points. The first resistance is at 49,000 (10 DEMA). Major resistance is 49,600-49,650 (20 DEMA). The first support is at 48,400-48,500 (yesterday’s low). Major support lies at 48,000-48,100 (series low).
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