Market Update by Imtiaz Merchant for 29th July 2019

Markets quite as expected continued the downside journey to test 11200 from where it recovered a bit to close the day and the week off the lows at 11285. The fall in the markets was primarily due to slowdown in the economy, lack of policy initiative by the Govt. June quarter Corporate results being muted baring few companies, unabated rise in unemployment and uncertainty about agro output since many parts in India is suffering from unprecedented floods and some parts receiving scanty rains, global cues not been encouraging,  all this lead to major correction in the markets and it appears that on the back of uncertainty in economic fundamentals more downside in the market is not ruled out. These are tough times in the markets and that investor who wants to invest for long term should initiate some buying traders and short term investors may better stay away.

Technical–Technically market look weak and vulnerable to more falls, although a small throwback rally is not ruled out since the market is oversold in the near term, on the higher side there are multiple resistances that may keep the market under check between 11400 to 11700 at best, however a close below 11200 will see the nifty sliding down once again and may test 11100 to 10600 levels. In the initial range for the market is between 11200 and 11500 whereas the broader range is between 11000 and 11700.

Market Update for 22nd July 2019 by Imtiaz Merchant

Market gave a catastrophic close on Friday and broke its short term trend down, all this happened due to multiple reasons, poor corporate earnings, global cues were negative followed by no major policy changes by the government on economic front and Budget failed to enthuse the market. Going forward it appears that market will go down further to test initially 11100 on the Nifty and subsequently it can go down as low as 10600, this can be reversal point because of valuation and stocks will be available at cheap prices, however in the short run any rise in the market will be used by the investor to sell stocks, hence a prolonged corrective action is quite likely, it appears that market will have a U shape recovery and a protracted range bound trade is not ruled out. Investors should exercise caution and remain at least 20% to 30% in cash until market stabilizes, nevertheless investor should exit from weak and under performing stock in the rally and try to remain in quality stock, that is having least leverage, good governance and consistent growth.      

Technical– Technically market look poised for more downside the first important support for the market is placed at 11100, but the asset test support lies at 10600 and as long as market is above this level there is good hope for the bull to come back. On the higher side 11720 is first important resistance followed by 11800, market may come out form the woods only if it manages to close above 11800 and stays there. The short term range for the market is 11300 – 11700 and the Inter mediate range is between 11100 and 11800. Movement in either direction beyond this range will determine the further trend.

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.

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.

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.