Saturday, 6 July 2019

Market Update for 8th July 2019 by Imtiaz Merchant



The event budget failed to enthuse the market, as a result market fell sharply by almost 1.25% in terms of index, but the fall outside the index was catastrophic and stock fell by 2 – 8%. The internals of the markets were extremely poor, and all this happened with higher volumes. The budget failed in policy regarding growth. Government going forward looking to borrow big time from overseas and this according to us is not a good sign, however some long term rationalisation majors were taken that could prove good in the long term, the very rich now will be taxed higher and the middle class by virtue of exemption limit of 5 lakh will get some relief. More thrust was given on encouraging of electric vehicles and lot of incentives was given in manufacturing the same. Higher excise duty on petroleum products and rising custom duty on gold will be look upon negatively. Although markets failed badly on Friday but still remained within a range between 11600 and 12000. It has to be seen how the market will behave on Monday and Tuesday and further course of action will be decided thereon.    

Technical– Technically markets in terms of Nifty looks vulnerable to more fall, trade in close below 11725 will bring down the market to 11625. As long as markets are above 11600 there is still a hope of bulls to stage a comeback, however close 11600 would see a extended fall or protracted corrective action and market could test perhaps 11100 – 11000. Since the market is crucially poised reversal cannot be totally ruled out, if the experts after looking to the blue prints of Union Budget and World markets cues  feels that budget may boost the economy that in terms of levels market may test 12000 initially and a close above this levels it could test 12400 – 12800 levels.


Friday, 28 June 2019

Market Update for 1st July 2019 by Imtiaz Merchant



AMID VOLATILE MOVES MARKETS ENDED THE DAY ON WEAK NOTE, HOWEVER, THE WEEK ENDED ON POSITIVE NOTE, BUT THE MONTH ENDED ON NEGATIVE NOTE, THIS DEMOSTRATES THE KIND OF UNCERTAINTY IN THE MARKETS. HENCE VOLATILITY IS PERSISTENT. THE NEXT MONTH IS VERY CRITICAL FOR THE MARKETS, THE ‘MAKE OR MAR’ MONTH, LOT OF EVENT AND NEWS FLOWS LIKE THE OUTCOME FROM THE ONGOING G20 MEET, FORTHCOMING UNION BUDGET ON 5 JULY, MONSOON SPREAD AND THE QUARTERLY CORPORATE RESULT WILL ALL DETERMINE THE MARKET TREND GOING FORWARD. IN EXTREME SHORT TERM THE NIFTY REPRESENTING MARKETS WILL BE IN TIGHT RANGE OF 11700 AND 11900. NEVERTHELESS STOCK SPECIFIC MOVES WILL CONTINUE PARTICULARLY ONCE THE BUDGET IS ANNOUNCED. INVESTORS SHOULD BE CAUTIOUS AND VERY STOCK SPECIFICALLY OPTIMISTIC, THIS IS A TOUGH MARKET.

Technical–TECHNICALLY THE MARKETS IN THE SHORT TERM LOOKS WEAK AND NOW VER CLOSE TO ITS SHORT TERM SUPPORT OF 11700, A CLOSE BELOW THIS LEVEL MORE CORRECTIVE ACTION WILL WITNESS 11600 AND PERHAPS SUB 11500 LEVELS. HOWEVER, IF 11700 IS HELD THEN AT BEST MARKET WILL REMAIN IN A RANGE, AND AS THE EVENT UNFOLDS MARKETS WILL TAKE ITS OWN COURSE, ALTHOUGH IN EXTREME SHORT TERM MARKETS APPEARS TO BE WEAK AND VULNERABLE, ONLY A CLOSE ABOVE 12100 WILL SEE A FRESH UPMOVE AND TE NIFTY WILL TEST 12600 TO 13000 LEVELS. IN CONCLUSION THE SHORT AND THE MEDIUM TERM TREND FOR THE MARKETS IS UNCERTAIN, NONETHELESS, THE LONG TERM TREND IS UP AND INTACT.



Saturday, 22 June 2019

Markets remain range bound - Market Brief by Imtiaz Merchant



Markets last week traded lower in the midst of geo – political concern in Iran and no clarity on US and China trade barriers and Budget worries, hence the market closed lower for the week by almost 0.5%. There was across the board selling in all the sectors and it was a pathetic close on Friday. It appears until budget on July 5, market would remain in a broader range between 11400 to 12000, unless there is an improvement in the global issues and forth coming budget we would have to see whether markets surge higher, however if budget prove to be lacklustre and there are no major policy decision on the economy, markets would see a sharp decline. Investors are once again suggested to remain at least 20-30% in cash to be deployed post budget.

Technical–Technically markets are crucially poised within a range. If a break out above 12000 happens, market will witness a sharp rally towards 12600 – 12800 levels and initially if markets break down 10600 and closes below this level, it would test 10400. Below this there would be catastrophe and market could see sub 11000 levels. In the best case scenario, it appears, until budget the market would remain in a range. Short term range is between 10600 – 10900 and the Intermediate (Medium Term) or the Broader range would be 10400 – 12000.  

Saturday, 16 March 2019

Stock Market Brief by Imtiaz Merchant for 18th March 2019




Markets are expecting Modi govt. to win the general elections and upward trend in global market helps market to rally about 11050 and 11200 and now, poised for higher levels. Looking at the market scenario it appears that this is a pre election rally in anticipation of strong government at the centre. It needs to be seen how the market closes under financial year ending 31st March 2019, next quarter is an election period for the market and if the existing government comes back to power then we can see the boost in the rally and market would in that case test 12500 to 13000 in the Nifty. However with so many parties, regional parties are in the fray and if uncertainty about the government remains, it would be deeply negative for the markets. One needs to watch out for election result and take major position after that.      

Technical The markets finally took a breakout above 11070 and continued its upward journey, market is likely to face stiff resistance at 11800, a close above this level could get us to level of 12500 to 13000, nevertheless in the best case scenario market may remain range bound between 11150 to 11770. Further breakout above 11770 will confirm market entering 12000 plus levels. Despite market being at its lifetime high, there are stock specific moments. If this may continue then market would remain in broad range. Long term investors can buy quality stocks with the view of 2 to 3 years.   
      
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Monday, 4 March 2019

Stock Market Brief by Imtiaz Merchant for 06th March 2019


Markets seem to be rightly priced at the moment since some bad or good news is unable to breakout or breakdown the markets and perhaps the market is anticipating some major news flow. Nevertheless the market ended the week and the day higher by half a per cent within the range.
The war like situation between India and Pakistan if escalates then certainly the nifty would go down below 1000 to make a panic bottom, however a positive news flows may be victory of present Govt. though the odds have come down but nevertheless it be a major trigger for the market. It further appears that stock specific move should continue amongst the stocks that are well governed, consistent in profit and having low debt. This is a good portfolio restructure time since good stocks available at decent price, long term investors should buy these kind of stocks and patiently hold on to them.


Technical Technically markets are in a range bound situation, nifty is trading within a specified range perhaps awaiting some news flows. In extremely near term the support exist at 10800 and then perhaps at 10640 below that a corrective action may see sub ten thousand levels. A close above 11050 would initially see 11200 and then perhaps 12000 plus levels should be on card. The sideways movement suggest that range bound markets will continue for some more day before breakout or a decisive breakdown. Investors are suggested to be a good portion in cash to be deployed if the markets breakout, or on deep correction and panic bottom.

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Saturday, 2 February 2019

Stock Market Brief by Imtiaz Merchant for 04th February 2019

Amid volatile and stocks specific moves last week, the markets ended the week on positive note up above a per cent and little short of major resistance of 11050. Although the markets during the week traded lower with uncertainties of interim budget, it was only on Thursday and Friday, on the interim budget day, that the markets moved higher to finish the week on positive note. The interim budget had mix reviews and showed the Government’s intention to give sops to middle class with tax exemption and cash transfer to the farmers. It needs to be seen how this is implemented and from where the funds will come- the Govt. will have to answer.
Going forward the focus will now be on the world economy and Market behavior and the forthcoming general Elections. Hence it appears that range bound trade will continue for some more time unless the market gets some significant good or bad news flows to pull or push the markets beyond range. The structure of the market and stock reveals that nevertheless stocks specific moves would continue.

TechnicalTechnically the market is gone for consolidation phase once again with 10750 as short term support and 11050 as resistance, with major breakout  at 11200 and support at 10600, these levels will make or mar the markets. Below a close of 10600 the markets will test 10500 and then perhaps 10000, or even lower. On the higher side if the Nifty manages to close above 11050 then initially it would test 11200 and then 12000 plus levels will be on cards. In the interim period the range one needs to watch out is 10600 and 11050 and in a little longer term one needs to look out for 10500 and 11200.

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Saturday, 19 January 2019

Stock Market Brief by Imtiaz Merchant for 21st January 2019



Markets on the back of improved quarterly result by few large cap companies like Reliance, Infosys, Wipro, Hind Unilever etc. and some policy announcement by the Govt. on agriculture, infra-structure and DIGITIZATION, and with reduced inflation and better economic outlook the markets ended the week on higher note, up over 1 per cent, apart from these companies some more Mid and Small cap companies gave improved result but the buoyancy in the market will come once the election results are announced that is three to four months away, further with improved global markets it appears that the year 2019 will be a better year for Investment. The sectors look poised to grow in sectors like Consumer goods, Healthcare, Information Technology and Infrastructure.
Investors should be stocks specifically and cautiously optimistic on the markets and buy only those stocks that are giving consistently good earnings and conversely ignore stocks with poor earnings.


Technical Technically markets looks poised against the major breakout at 11200 minor breakout at 11050, if the markets is successful in clearing the deck of this two major huddle, then certainly it will poised to test the all-time  high of around 11800, if closes above this level then certainly test much higher levels. However if it fails to close above major huddle of 11200 and close below 10780 it will once again go for corrective action. Hence the initial range for the Nifty is between 10780 and 11050 and wider range of 10700 and 11200.

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Saturday, 5 January 2019

Stock Market Brief by Imtiaz Merchant for 07th January 2019

On the back of weak and volatile global markets may it be equity or commodity ended the week on negative note, though finish the day on Friday on positive note with improved volumes, the European and US markets too ended the day on Friday on a robust close in anticipation that world economic growth including from emerging markets particularly. Indian scenario is concerned the volatility is likely to continue due to general election few months away the outcome for the same would determine the course of market, plus some populous measures taken by the government will be detrimental for the markets. Quarterly results will also play key role. We expect the year 2019 would be volatile and range bound unless good news on economy and government stability will act as a trigger for the markets. Markets will be very stocks specific, it will not be the cats and dogs’ market, companies doing well will be rewarded and companies reporting bad results will at same time punished. I call this year 2019 to be a more rational year for the equity markets and stocks will discover the fair values.


Technical- Technically the markets on expected lines are range bound and will continue to remain so until it breaks out 11050 levels on the Nifty with improved volumes, conversely it the markets breakdown the lower levels say 10500 on close basis then a prolonged correction is not ruled out. And until then market will oscillates initially between 10600 and 10950, hence we can say as the days go by the markets will sooner than later find the either breakout or breakdown though chances of breakout seemingly looks higher.

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