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Top private sector banks likely to see more selling pressure going forward
Given that we are entering a week of intense emptiness, do you expect us to see a lot of fuss and fuss?
I will call it one of the best months in the market. Of course, the last few days have not been easy, especially on Fridays when indications were not good. However, the way the markets have been meeting in February since Budget Day itself has been positive. When you see a 7,000 point meeting at Bank Nifty, 1,700 to 1, ..
What we saw on Friday and the second half of last week was very much related to the regression process, the markets were moving. What happened again, after a price correction weeks ago, Nifty and Bank Nifty have both made bearish candlestick patterns. Often, when we see those bearish patterns, they are followed and disintegrated. In that case, it is possible that the action on the indices may remain slightly muted.
The 15,000 level in the index remains the most important support area. We were able to skip below this on Friday and almost had a touch and close to the 15,000 mark. By next week, this level could be a significant level. If we break and keep below the 15,000 level, then following a 500 point drop to Nifty could be a great opportunity.
What do you see in every PSU trade? Do you think it is temporary or does it seem that there is some foundation that makes a big difference?
Whether it is a PSU bank package or certain insurance shares such as GIC Housing, etc., or gas distribution names; when you look at it, there is a flow of certain stories and a specific theme attached to these stocks. We have seen that the markets have been in a volatile situation and whenever the news is positive for a particular set of shares or a particular sector, we have seen that the shares in this sector go up.
Now the big question is, if the flow of news is dominated by the market and if the events are no longer played, how will the stocks react because the stock marketers are the ones who are directly targeting such type of news flow and try to trade these types of games. But once the momentum is over, whether trading interest will exist or not is the biggest question that can be on the line of most stocks.
For example, in the classic field such as Nifty IT and pharma, many stocks and media flows have slowed down and you have seen the price action of these two sectors. They go into a gradual correction, a slight decrease or cooling. I can see that if the PSU bank pocket and the PSU package as a whole go to the same slope or slower where there is no flow of news, I believe you can build on the old saying that these shares are much higher. But if they go through a very sharp transition, probably a V-shaped reverse type after the news is off, then I believe that might break through the trend of more PSU names.
I think in the next few days, the idea may be clearer whether this is a slow correction or the stock has risen sharply or whether there is a sharp correction in these terms.
In terms of industry or stock intelligence, what is the leading indicator that markets have seen some return here?
What could be one of the indicators of market stability? I think one of them is the result of the measurement, the fields we usually give it every time we see an adjustment. If you look at the last three weeks or four weeks of price action, there have been three key sectors - IT, pharma, FMCG and car stocks - that have gone through the repair phase.
If you look at these stocks, most of these stocks have fallen by about 10% -15% and some of the top beta pockets in the sectors have been below 20%. Now whether or not there is a bounce resumption in this space or not, that would be the first round of stability, an indication I can find in these terms. If I'm not mistaken, on Friday you also saw some green shoots coming across the TCS, Dr. Reddy and Nestle and most of these stocks were coming back from mid-intraday at the end of the session. This is especially true if you are getting into emergency mode or defense mode.
Which sectors can continue to detect sales pressure? I still believe that when there are a lot of calls to record and sell food-based products that are very dangerous in private bank shares. I believe they can be under pressure and especially the top three three words. If you look at the composition of the data obtained, HDFC Bank NSE -0.98%, ICICI Bank and Kotak Bank NSE -0.34% and even Axis Bank NSE -3.52% are three names where you have seen many high-risk calls. I think that if there is any kind of rising pressure, which the markets may be showing, one should be aware of these three-four terms because they could signal another round of cooling into Bank Nifty, which could also affect Nifty.
The general insurance space had a terrible rally. The IDFC First Bank NSE 7.40%, for example, also saw strong movement. What is your opinion on the charts?
Excellent chart. Honestly, the moment the IDFC First Bank exits that 50 band or 50 or 47.5-48 band in December at the end and in January, from then on, the stock texture changed completely. Keep in mind that it provided a nearly three-year exit from the downhill line. Three years ago, from 2017 or 2018, stocks were entering that pattern of lows and lows on the monthly charts. So in order for the stock to go through those bad monthly patterns, we need a lot of fire power and a lot of volume and we’ve seen that happen at IDFC First.
It stayed on the sides for about a month. As of the end of December, it was at 50 plus or minus sides; Rs 2 or Rs 3 was the trading range for the index. So he was able to grind and get a lot of instability, and he tried to shake even the weakest hands in the middle. However, the way stock is charged, is just an indication that trends may be compliant with IDFC First Bank.
I believe that the stock in the next three to six months can be a member of Rs 75 to Rs 85