Trade Setup | Anuj Singhal’s Market Outlook 

CURRENT MARKET: ONE TYRE PUNCTURED

– Indian market has 4 large sectors: Banks, IT, Reliance and FMCG

– Currently, Banking just isn’t transferring, different sectors okay

– Pharma is just like the spare tyre for the automotive, doing nicely

– Yesterday, Nifty ended at highs and Bank Nifty at low

– Fin Nifty expiry at this time, Banking underperformance could proceed

– Best commerce proper now could be in IT and Pharma

BANK NIFTY: WHAT’S THE PROBLEM?

– Banking shares have underperformed because of 4 causes

1)      Much extra decline in NIMs than anticipated

2)      Clear indicators of slowdown in credit score development

3)      Asset high quality deterioration

4)      Valuations barely demanding now

RBI financial coverage this week, path could emerge on Thursday

HDFC Bank in focus at this time, largest element of index

FTSE to extend weight in three tranches as an alternative of 1

NIFTY OUTLOOK

Date                      High                      Low

Aug 3                    19537                   19296

Aug 4                    19538                   19436

Aug 7                    19620                   19524

Nifty has now made larger excessive and better low for 2 days

Nifty yesterday closed above 20 DEMA and at 10 DEMA

First resistance: 19,600-19,620 (10 DEMA and yesterday’s excessive)

Bigger resistance: 19,680 (Options based mostly)

Bigger assist: 19,436-19,296 (earlier swing lows)