Dalal Street Week Ahead: Nifty Analysis For February First Week

LAST WEEK

NIFTY opened the week with a gap-up at 18,119. The index closed above 18,100 on Monday and opened with another gap-up on Tuesday. The day ended absolutely flat. Nifty had a huge red candle just after opening on Wednesday. The market remained closed on Thursday on account of Republic day. Nifty had a huge fall on Friday as well. The index ended the week at 17,604, down by 423 points or 2.35%.

BANK NIFTY opened with a gap-up at 42,893 on Monday. The index took firm support at 42,600 twice but the negativity on Wednesday took the index down and the index fell by more than 1,000 points on the expiry day. The fall continued on Friday and BNF ended the week at 40,345, down by 2162 points or 5.09%.

IT moved up by 0.8%.

Foreign Institutional Investors net-sold shares worth Rs 2,500 crores last week.

Domestic Institutional Investors net-bought shares worth Rs 3,500 crores.

The Hindenburg report ruined the market sentiments. The report said that the Adani group has committed fraud. More importantly, prominent figures in the market are giving credibility to the Hindenburg research team and this has aggravated the issue.

Adani stocks plunged last week and the banks followed. As you know, several banks have lent loans to the Adani group and if Adani gets into trouble, the banks will fall.

The global markets rallied last week. The US markets were led by the IT giants. FTSE closed flat. The Asian markets also took part in the rally. The Chinese markets remained shut the previous week on account of the Chinese New Year.

Looking at the week-chart of Nifty, the structure has been ruined. The up-move that started in September was arrested in December and the market was consolidating above 17,800 in the last four weeks. The level has been broken and it seems like another impulsive round on the downside.

SGX Nifty is at 17,720.

INDIA VIX increased by 25% to 17.3.

WEEK AHEAD

NIFTY has supports at 17,500, 17,420, 17,300 and 17,100. We can expect resistances at 17,650, 17,730,  17,800 and 17,875.

BANK NIFTY has supports at 40,150, 40,000 and 39,850. Resistances are at 40,400, 40,700 and 41,000.

FIN NIFTY has supports at 18,000, 17,915 and 17,700. Resistances are at 18,120, 18,280 and 18,400.

NIFTY has the highest call OI build-up at 18,000. The highest put OI build-up is at 17,000.

BANK NIFTY has the highest call OI build-up at 43,000. The highest put OI build-up is at 40,500.

Major events of the week are as follows:

MONDAY

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TUESDAY

Euro CPI

German GDP

Germany CPI

WEDNESDAY

Union Budget

Germany Manufacturing PMI

Fed interest rate decision

THURSDAY

ECB Press conference

BOE and ECB interest rate decision

FRIDAY
Jobs data

So, it is an event-packed week. Union Budget and Fed interest rate decision will be the most important events. We can expect a 25 basis points rate hike this time.

This is the last budget before the 2024 Elections. This makes it more important. Inflation is a worry. Will there be a general price rise is the question. As you know, there is a global economic slowdown and layoffs. We can expect a rise in the basic exemption limit in tax. The government is expected to take measures to strengthen the start-up ecosystem. PLI schemes may cover more sectors.

Talking about the Adani issue, their CFO said that these false accusations are a threat not to Adani but to India. One should not forget that Indian banks have trusted Adani group and also the government has entrusted Adani with various projects. The Fall of Adani would be catastrophic. We will have to wait and see if Adani can fulfil the promises.

Half of Nifty 50 companies have released their earnings already. SBI, HDFC, L&T and Bajaj Finserv are among the major companies that will announce their results this week.

 It is better to stay away if you are a non-directional option seller or else, you can trade with limited quantity. 

I will watch 17,500 on the downside in NIFTY. 17,800 can be watched on the upside.

Let us know your expectations for the week in the comments section!