Market Strategy: Anuj Singhal said that yesterday’s market rally was due to 3 reasons. The first reason was the excellent auto sales figures of December, the second reason was the excellent Q3 deposit growth rate of banks and the third reason was the 9% jump in the job index in December. All 3 reasons are fundamental in nature. It is too early to say whether everything has changed. Today DMART’s update is also encouraging. FIIs have returned, buying cash and F&O. Next few days, stay long with trailing SL.
Market: What should be the strategy?
Anuj Singhal said that FIIs have made purchases in cash after December 13. Cash volume of FIIs jumped by more than 5x yesterday. Even now the volumes of FIIs are at 100%. FIIs volumes should be 100% from Monday. FIIs covered short in F&O, added long. FIIs added 21,400 longs and cut 10,500 shorts. There was heavy buying by FIIs in stock futures also.
One view was that Nifty could reach 24,200 before January 6. Yesterday Nifty crossed 200 DMA and 20 DEMA in a single day. DMART Q3 Update on 17% Earnings Growth. Mostly middle class buys goods in DMART. Bring your Trailing SL in Nifty to 23,850. Buy on dips intraday till Rs 24,000 left.
How much can we trust tomorrow’s rally?
Anuj Singhal said that yesterday’s rally came due to a high frequency data. Expiry had a big role in the post-afternoon rise. The market was very oversold, a trigger was needed. The market got the trigger in the form of auto sales. But keep in mind that sales of 2-wheelers are still weak. Last time also the rally had failed at 24,800. There will always be a risk that this is also a counter trend rally. But this will always be known only after the event takes place. The job of a trader is to take decisions according to risk-reward.
He further said that going forward the data of big banks and FMCG companies will be important. Management’s commentary also needs attention. It is best to stick to stocks with good data and good commentary. Examples are Ashok Leyland and Maruti. At second position will be companies with expected results and good commentary. For example Tata Motors and Hyundai
Stay away from companies with poor results and weak commentary.
strategy on nifty
Anuj Singhal said that the first support is at 23,850-24,000 (200 DMA, 10 and 20 DEMA) while the first support is at 23,700-23,800 (Option Zone, yesterday’s low). The first resistance is at 24,250-24,300 (50 DEMA zone). Major Resistance 24,380-24,450 (Option Zone). Stay long, increase SL to 23,850. Buy zone at 24,000-24,050, and stop loss at 23,850. Sell trade will open only if yesterday’s low is broken.
strategy on nifty bank
The first support of Nifty Bank is at 51,400-51,500 (10 and 50 DEMA) while the major support is at 51,000-51,200 (Previous resistance). The first resistance is at 51,700-51,800 (20 DEMA). Major resistance lies at 51,850-52,000 (50 DEMA). Buying zone is at 51,200-51,400, for this place SL at 51,000.
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