Saturday, 30 June 2018

Market Brief for 2nd July 2018 by Imtiaz Merchant

Market Brief – Mix news flows kept the markets jittery and volatile during the week, with oil prices hitting the roof top as a result weakening dolour, Govt envisaged to further hike of oil prices may cause inflation and cost of production to go up and perhaps may decrease the consumption, although the monsoon appears to be normal would negate some the problems faced by the economy. Despite slow down in the economy and lack of drastic policy action by govt, the PE multiple still favour the bulls unless reported weak corporate earnings, may be a setback for the markets. Sectors that are likely to do well are the information Technology, Consumer Good & Services (including the FMGC), very selected Pharma and Industrials.
Technical In the absence of any significant news flows the markets once again traded in a range and amid volatility ended the day on Friday on a robust note, however the week ended marginally lower. Range bound trade is likely to continue until the Nifty closes above 10950 and Sensex closes above 36000. On the lower side first very, important support exists at 10550 closes below this the nifty will be poised to test 10400 the final level to watch in medium term. For extremely long term 9300 is vital support and the market is less likely to test that. The near term range for Nifty is 10550 and 10950, from a medium term perception 10400 and 11200 remains important range.

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Saturday, 23 June 2018

Market Brief by Imtiaz Merchant - 25th June 2018

Market Brief – Amongst the mixed news flows, weak global cues and falling crude prices, strengthening of Rupee kept the market jittery, as a result market remain volatile and range bound finally on Friday it rallied to end the week on flat note, still giving hope to Bulls. Prime Minister statement that India is having a robust growth and will be a $5 trillion economy, this news is likely to keep market buoyant, with corporate result is expected to delivers good numbers hence markets are showing strength and it appears 10600 is fundamentally strong floor for the market. Sectors that are likely to do well are the Financial, Consumer Goods, Information Technology and Pharmaceuticals the stock of other sectors will selectively do well. This a good time to Buy selected stocks from the mentioned sectors. The deterrent for the market is the upcoming Assembly Elections and it needs to see how it unfolds  
Technical Nifty remains in a range last week and finally ended the day on positive note and the week ended on flat note. Markets has been in a sideways for past two months now, hence a break out above 10950 would witness a swift rally and market will soon see a new historic high, However since the market is still in a range any severe bad news and a close below 10550 would see the market going for deep correction and perhaps even 10000 – 10200 is a possibility, but its early to say that and the probability of market going up is higher. Hence we can conclude that marker is still in the safe hands of Bull and likely to see new high.

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Market Brief by Imtiaz Merchant - 18th June 2018

Technical–Markets participants once again remained indecisive and the trend failed to breakout or breakdown and hence traded in a range between 10750 and 10900, the firm breakout for this market is close above 10950 and a breakdown though a distant away at close below 10600 to 10550 will confirm a down trend. It is still not clear, although the long and the short term is up and the intermediate (Medium) trend is down and would turn up close above 10950 this would also witness all trends being up hence big rally is not ruled out. However once should be careful below 10640 and under 10550 the markets would breakdown and would witness across the board sale. Investors should trade cautiously and should remain stocks specifically bullish, at the same time exit from week and underperforming stocks.

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Market Brief by Imtiaz Merchant - 11th June 2018

Market Brief – Markets traded in a broad range of almost 300 points and on the back of good global cue rate hike by RBI and anticipated good monsoon, soften crude oil prices, recovered the markets to end the week on modestly positive note otherwise looking a frail market. Although markets rallied from the low, nevertheless, it’s too early to say that markets will see sharp rally until there is more improvement in the underlying fundamental. Going forward the corporate results, monsoon, crude oil prices, economic policy initiative by the Govt., and politics will dominate the markets and one needs to watch out the development closely. Nonetheless, stocks specific moves in the market should continue and investors should look in for companies with least debt or no debt, governance, good cash flow, and progressive gross and net margins of profit. Avoid contra buying.
Technical – Technically the market now is broad range between 10500 and 10900, and extreme near term it is in a range between 10650 and 10850 and a close on either side will determine the trend going forward, the trend is now in sideways. Selected stocks are doing quite well and many of the stocks are not doing well and are near their 52 weeks low particularly in the mid and the small cap companies. It appears that based on the fundamental factors market will sooner than later come out of the range and on breakout one should ride the trend, however if the market chooses to break down then one must use stop loss and exit stocks or else the correction can be sharper than expected.

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Market Brief by Imtiaz Merchant - 4th June 2018

Market Brief – Absence of any significant news flow or any major trigger, markets traded in a range, however due to improved global cues it managed to end the week modestly on positive note, up nearly by a percent. Although markets held well for last couple of months but the internals (breadth) has tuned very bad and the numbers of stocks declining for past couple of month outweigh the stocks going up. Thus, this not an investors markets, rather traders market as of now. It further appears that until we have significant good news flows in terms of economy & industry and better political environment and stability markets will remain jittery and frail.
Though some green shoots are visible as well as tailwinds in term of corporate earnings, inflation, correction in international crude prices, rupee expected to be getting stronger, and interest rates appears to soften all this will help in increase in aggregate demand and thus the economy. Nevertheless, the inverse is not completely ruled out. Investors thus should exercise caution, stay partly in cash say 20 to 25 percent to be deployed if there is deep correction or once the market is stabilized.
Technical –Technically market is in a range for quite some time now, with 10400 and a rock-solid support and 10950 a stiff resistance and in extreme short term the range is between 10550 and 10740. It appears that range bound trade is likely to continue for some more time unless it breaks out on either side. Trade and close above 10950 the upward journey will continue into new historic high and a close below 10400 a protracted correction will see substantial downside. Markets needs a superlative and authoritative news flows to move outside the the range and that looks less likely in the short term.

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