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F&O guide for May 27: Here's why analyst recommends this Nifty strategy
Sahaj Agrawal Mumbai
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Mint
16 hours ago
- Mint
Nifty 50, Sensex today: What to expect from Indian stock market in trade on August 14 ahead of weekly F&O expiry
The Indian stock market benchmark indices, Sensex and Nifty 50, are likely to open on a tepid note on Thursday, tracking mixed cues from global markets. The trends on Gift Nifty also indicate a muted start for the Indian benchmark index. The Gift Nifty was trading around 24,694 level, a discount of nearly 18 points from the Nifty futures' previous close. On Wednesday, the equity market ended with decent gains, with the benchmark Nifty 50 closing above 24,600 level. The Sensex rose 304.32 points, or 0.38%, to close at 80,539.91, while the Nifty 50 settled 131.95 points, or 0.54%, higher at 24,619.35. Here's what to expect from Sensex, Nifty 50 and Bank Nifty today: Sensex reached 80,700 level on Wednesday, but failed to sustain that level and closed marginally above the opening levels. 'The activity is indicating indecisiveness; however, the positive thing is that Sensex closed above the 10-day EMA, which could pull the market towards the 20-day SMA, which is at 81,200. Support is present at 80,300, below which Sensex could gradually decline to 80,000 or 79,800 levels. It is advised to trade as per the given levels,' said Shrikant Chouhan, Head Equity Research, Kotak Securities. According to Om Ghawalkar, Market Analyst, the support for Sensex lies at 78,800 - 79,000 and 79,400 - 79,600 levels, while the index may face resistance at 80,800 – 81,000 and 81,500 – 81,700 levels. In the derivatives segment, the highest Nifty call open interest was observed at the 24,700 strike, while the highest put open interest was concentrated at the 24,600 strike. This positioning suggests that while resistance remains near 24,700, traders are anticipating potential upside, with a sustained close above this level required to keep bullish momentum intact, said Amruta Shinde, Technical & Derivative Analyst at Choice Equity Broking. Nifty 50 formed a bullish inside bar candlestick pattern on the daily time chart. 'A small positive candle was formed on the daily chart with upper and lower shadow. Technically, this market action indicates gradual upmove in the market with lack of strong momentum. The short term trend of Nifty remains positive. A decisive move above the crucial hurdle of 24,700 levels could open further upside towards 25,000 levels in the near term. Immediate support is placed at 24,465 levels,' said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities. According to Hrishikesh Yedve, AVP Technical and Derivative Research, Asit C. Mehta Investment Intermediates Ltd, Nifty 50 formed a small green candle on the daily chart with shadows on either side, indicating indecision. 'If the Nifty 50 index maintains above the 100-DEMA level of 24,590, the pullback rally could extend towards 24,840, where the 34-DEMA hurdle is located. On the downside, last week's low around 24,340 will act as a major support,' said Yedve. VLA Ambala, Co-Founder of Stock Market Today believes that the market is likely to experience a short-term pullback, and traders are advised to continue following the buy-at-support strategy. 'We can expect Nifty 50 to find support near 24,560 and 24,480, and meet resistance near 24,750 and 24,860 in today's market session,' Ambala said. Bank Nifty index ended 137.75 points, or 0.25%, higher at 55,181.45 on Wednesday, forming a Homing Pigeon candlestick pattern on the daily chart, which is typically considered a bullish reversal signal when it appears after a downtrend. 'This pattern suggests that selling pressure may be easing, and a potential rebound could be on the horizon. However, the confirmation of this pattern is necessary in the next trading session. Going ahead, the 100-day EMA zone is expected to act as a key support area for Bank Nifty. A sustained hold above this zone could help maintain the current consolidation and potentially set the stage for a recovery,' said Sudeep Shah, Head - Technical and Derivatives Research by SBI Securities. According to him, on the upside, the 55,500 – 55,600 zone will be a crucial resistance, and a decisive breakout above 55,600 may trigger a sharp trending move to the upside, while a break below 54,850 could lead to renewed selling pressure, opening the door for a deeper correction. Om Mehra, Technical Research Analyst, SAMCO Securities said that the Bank Nifty index is finding support in the 54,950 – 55,000 band, where the 100-SMA is currently placed. However, the index remains trapped beneath the 9-EMA, 20-SMA, and 50-SMA, all of which are sloping downward and capping any meaningful rebound. 'Momentum indicators have shown marginal improvement — the RSI has edged above 40, while the MACD is beginning to flatten, signalling early signs of recovery. On the hourly chart, the index is attempting to base out, but a decisive close above 55,350 – 55,450 would be needed to extend on the higher side,' Mehra said. For now, he believes, 55,050 – 54,950 remains the immediate support zone, followed by 54,700 on further weakness. Unless the index reclaims the overhead resistance cluster, Bank Nifty may remain range-bound with a slight positive outlook as long as the 100-SMA continues to hold. Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
Mint
a day ago
- Mint
Bulls ride high on India stocks, expecting success of US-Russia talks on Ukraine
Bulls appeared to be taking charge of the stock markets on Wednesday, ahead of the Trump-Putin talks, where a breakthrough or an impasse could significantly impact Indian equities. The two leaders are slated to meet in Alaska on Friday in a bid to end the over-three year Ukraine war. A day after foreign portfolio investors trimmed their index future longs to 7.95%, only 20 basis points shy of the record low of 7.75% on 22 March 2023, in light of the US Fed rate tightening cycle, bulls sold huge quantities of put options between the 24,500 and 24,600 levels, expecting a rally in the markets ahead of the talks. The contracts expire tomorrow. The Nifty 50 traded 0.6% higher at 24,634 at 1 pm. Amid likely domestic institutional investor buying in the cash market, bulls sold a massive number of puts at 24,600 – the open position at this strike rose by a whopping 227,758 contracts to a total 284,785 contracts. At 24,550, the open or outstanding positions jumped 148,077 contracts to 193,635 contracts and at 24,500 by 152,528 contracts to 260,034 contracts. The jump in open positions at these levels indicates that bulls expect the markets to close at or above 24,600, which will enable them to pocket the premium paid by the put buyers, who expect the markets to correct. "The correction premise (of put buyers) is based on the talks stalling and a continuation of the war, which could impact countries like India that buy Russian oil and have been slapped with a proposed punitive tariff of 25% from 27 August," explained SK Joshi, a consultant with Khambatta Securities. Other analysts cautioned that it was too early to take such calls because the Indian markets would react to the outcome of the talks only on Monday, with Friday a holiday for Independence Day. "The market is likely to consolidate in a 24,400-24,700 range ahead of the Russia-US talks in Alaska," said Sahaj Agrawal, head of derivatives research at Kotak Securities. "The reaction to the outcome will be on Monday." Options data and sentiment for now also suggest a sideways movement, with no major horizon shift on the cards, he added. The put-call ratio of the weekly options expiring on Thursday stood at 0.99 intraday, which means that for every 100 calls sold, traders had sold 99 puts. On Tuesday, the ratio stood at 0.65, or only 65 puts sold for 100 calls sold. Time correction The benchmark Nifty 50 has been in a time correction for 11 months now, which is longer than the nine-month time correction that followed the outbreak of the covid pandemic in 2020. Time correction implies an extended period of stagnant to marginally lower price movement. The Nifty has fallen 6.25% from a record high of 26,277.35 on 27 September last year to Wednesday's intraday level of 24,634. While the Nasdaq, the UK's FTSE and Japan's Nikkei trade at record highs, Indian stock indices haven't been able to reclaim their previous high even 11 months later. In the last major down-cycle, the Nifty fell 40% from a high of 12,430 on 20 January 2020 to 7,511.10 on 24 March that year when the pandemic surfaced. However, it reclaimed the high in nine months, closing at 12,632 by 9 November. The current time correction is due to tepid earnings growth and more lately because of Trump's crushing tariffs on India, which Moody's expects could trim its current fiscal growth estimate by 30 bps to 6%. "We have been in a time correction for nearly 11 months now and will have to see how the geopolitical events play out to reckon whether we will break through the 26,277.35 record high of last September or test the multi-month low of 21,743.65 of this April," Kotak Securities' Agrawal added.
Economic Times
a day ago
- Economic Times
Which sectors will outperform the market in 2025? Hospitals, airlines, or something else?
Pratik Gupta, CEO and Co-Head, Institutional Equities, Kotak Securities, says IT services, consumer sectors, and banks are expected to underperform due to factors like low volume growth, lower NIMs, and higher credit costs. Conversely, hospitals, hotels, airlines, and Bharti Airtel are favoured for their domestic focus and secular growth. While private banks may not outperform in earnings, their attractive valuations make them appealing compared to overvalued sectors like EMS companies. ADVERTISEMENT What is your take on the earning season so far because now that we have finished with all of the Nifty 50 earnings, and particularly the last three have been quite strong. How has the earning season been so far? Any unexpected misses or surprises that you have spotted? Pratik Gupta: As far as the earning season is concerned, it has been broadly in line with somewhat muted expectations ahead of the earning season. For example, for the Nifty as a whole, we were expecting about 5% earnings growth. That has come in at about 6.5-7% for the June quarter. But more important has been the commentary and the guidance which has been weaker than expected and the continuing weakness in the economy. At Kotak, we cover about 300 companies, so for the broader universe and more importantly for the Nifty 50, before the start of the June quarter earning season, we were projecting about 12% earnings growth in FY26. That estimate has now come down to 10% and our analysts still see further downside risks if things do not pick up in the next one or two quarters. So, the earning season has been okay and there are a lot of hopes now on the second half post monsoon recovery, the festive season demand, the impact of the RBI rate cuts. Dipan Mehta highlights capital goods and power as next market leaders Obviously most important is the expectation that the Trump tariffs will somehow come down to more reasonable levels next week or later this month. If those things do not pan out, then as far as earnings are concerned, we could be in for some negative surprises going forward. In this kind of flux of all the news flow, all question marks about what the festive season is going to do, what the government intends to do after the big fillip of 50 bps cut from the RBI, and the big question mark on tariffs, how should investors be positioning themselves now because at best you only have very tactical short-term visibility? Pratik Gupta: You are right, which is why we are recommending a somewhat cautious stance. We do not think this is an environment where you need to take on risks. We would recommend a couple of broad themes. One, look at domestic plays rather than export plays. Second, look at quality versus value momentum, cyclical kind of plays. The third is a corollary of the second one; largecaps versus the small and midcaps, tend to weather an economic slowdown much better. What is clear is we are going through a slow growth patch and this may persist for some more time and who knows it may get worse if the tariff headwinds do not abate. So, we are in for a tough economic environment. We do not see signs of a very strong domestic economic recovery, at least not in the short term. We have not seen any sort of government action as such coming through in terms of reforms. So, until then you have to be somewhat cautious. So, stick to domestic plays, stay away from IT services for example, where even before the US tariff threat, we were concerned about high valuation and the weakness in discretionary IT spending. Then we have got the AI risk coming through, we had ChatGPT 5 being released last week, and that just shows overall how things are moving in that direction. So, generally be cautious, stay away from cyclical or rather high beta plays, be defensive and do not try and be a hero in this environment, that is sort of the broad advice. ADVERTISEMENT You have been mentioning that you have made some tweaks in your earnings estimate which is now down to 10% versus 12% earlier. Help us understand which sectors are you sporting that may outperform this growth number because of late, we have seen some sectors and rather some companies talking about double-digit growth. A case in point is hospitals, the EMS companies and select pharma companies as well. Pratik Gupta: Let me begin with the sectors which are likely to underperform and that is usually typically this year it has going to be the IT services companies, the consumer sector where volume growth is still low single digit, revenue growth in maybe high single digits, and even the banks this year are likely to not show very strong earnings both a combination of lower NIMs as well as higher credit costs. These are the large sectors which will likely underperform. Unlock 500+ Stock Recos on App When it comes to outperformance, as you rightly pointed out, some of the sectors you mentioned we also like them. Hospitals are definitely a space we like. This is a sector which is somewhat unimpacted by the tariff situation or global slowdown, and so that is a secular growth story. Valuations are a bit on the topish side, but nonetheless growth is very strong. So, we like the hospital space. ADVERTISEMENT Hotels, airlines are the other sectors we like. Again, more domestic-focused, less impacted by what is going on globally or with tariffs. In telecom, frankly, there is just one play, Bharti Airtel, and we like that one as well. We also like some of the leading NBFCs where the decline in funding costs should basically help them and the credit cost impact may not be as much. So, we like some of the NBFCs. We do not think private banks will outperform from an earnings perspective but valuations have come off. A lot of these stocks have come down sharply and in the context of the overall market, these stocks are looking relatively more attractive. The Nifty is trading at 21 times. So, we have to look for not just where earnings are very strong like the EMS companies that you pointed out. They have very strong earnings growth, but valuations are off the charts. These stocks are trading at 60 to 80 times one year forward earnings. We like the businesses but not the stocks and which is why we would rather be in businesses which are not doing as well like the banks but where valuations are a lot more attractive. ADVERTISEMENT (You can now subscribe to our ETMarkets WhatsApp channel)
