WEEKLY TRENDSETTER (DEC 31st,2021)
| 2021 | DEC 24 | DEC 31 | Ch % |
| NIFTY | 17004 | 17354 | 2.06 |
| BANK NIFTY | 34857 | 35481 | 1.79 |
| USD/INR | 75.00 | 74.30 | -0.93 |
MARKET REVIEW–The year ended with a flourish and the Nifty closed above 17000 with a late recovery from the banks. The FII selling was mixed and the New Year could be interesting to see if there is a change in the mood. Interestingly the rupee continued to strengthen and the last 15 days saw the rupee strengthen from 76.42 to 74.30 and is now resting on the 200 -dma.
INTERESTING TIDBITS
1.Pointers of things to come –If there was one phenomenon which puzzled investors in 2021 was the valuation at which several new age scrips were trading at. Likes of PayTm, Nyka, Zomato, which are still in early days of business with huge losses or slender profits have been showcased as the scrips for future going by the fancy prices at which the IPO s were launched. Online business is here to stay and the pandemic has accelerated the use of digital shopping. The New Year message was an apt pointer to this where Swiggy clocked over 9000 orders per minute and Zomato crossed 7000 orders per minute which also resulted in UPI payments coming under huge pressure! With the millennial ever savvy with gadgets digital use is likely to increase manifold in the coming years.
As investors we need not jump into such scrips but watch out for the emerging trends within several of these scrips which could turn out to be potential multi baggers 10 years down the line.
2.Shopping Abroad-Mutual funds are now aggressively shopping for scrips on international bourses and likes of Tesla, Alphabet and Nvidia are among top holdings. The top 10 holdings account for 50% of the international scrips. The investment in international companies surged from Rs 10042 cr in Dec 20 to Rs 33078 cr as of Nov ,21.
MARKET OUTLOOK.
Some technical cues are as follows going by market trends: –
NIFTY– The index did better than expected and in the last few weeks has managed to claw back from below 17000 which ideally should act as a support. On the upside 17650-700 could act as a good resistance zone and could be used for profit-taking.
BANK NIFTY -The index has been relatively weak and has now been trading below 35700 which is the 200-dma. The coming year could see this sector determining the broader trend of the market. Caution is clearly advised as the New Year could see some interest rates hardening. A climb above 36000 looks difficult and 35800-36000 levels could witness profit-taking. On the downside 34500-700 will be a critical support area for the index.
SCRIPS ON RADAR
The year 2021 clearly belonged to the mid-caps and small -caps which saw a great revival after a great melt down in the 2018-2020 period. Some crystal gazing was done to identify scrips which could continue to march ahead in the year ahead.
Alok Inds-(25.75)-This scrip had an incredible run in 2020 from Rs 3 to 61 which ended in July 2020 itself while the rest of the small and mid-caps were still coming out of a deep correction. Since then, the scrip corrected all the way down to 18 and in 2021 was stuck in a range of 20-30. However, this range is likely to break on the upside and the scrip could see levels of 40-45 during the year. Thus, accumulation could be considered as risk reward looks favorable.
Century Enka (452)-The scrip had a good 2021 and rallied from 210 to 518 before some correction which saw the scrip down to 362.However, the recovery has started and the scrip could scale past its previous for a possible target of 650-700.Accumulation could be considered at declines.
Hindustan Foods (1923)-This scrip had an incredible jump from 870 to 1800 in Dec 20 and further to 2580 in Feb,21 before cooling down for the rest of the year. However, after seeking levels of 1700 it has again started an uptrend. After months of consolidation the scrip could scale past 3000 in the coming year. Gradual accumulation could be considered.
Wishing all readers, a very happy New Year. Retail has been the backbone of the rally in 2021 and this trend could continue in the coming years as equity investing attracts the young and old alike.
Have a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam