WEEKLY TRENDSETTER (JAN 28THth,2022)
| 2021 | JAN 21 | JAN 28 | Ch % |
| NIFTY | 17617 | 17102 | -2.92 |
| BANK NIFTY | 37574 | 37689 | 0.31 |
| USD/INR | 74.40 | 75.07 | 0.90 |
MARKET REVIEW– The market had a mixed week and though the broader market saw good buying support Nifty in particular was subdued as the FII s were on a sell mode and large caps continued to be under pressure.
BUDGET EXPECTATIONS
Auto industry –Expectations are high that the EV incentivization process will continue. Local production of EV majors could get a huge boost as foreign companies like Tesla look to make India a manufacturing base. Charging stations could get some boost as well as EV infrastructure needs beefing up before the EV vehicles number increases.
Covid affected sectors -Sectors like hotels, entertainment, travel and tourism which have been bearing the brunt of Covid pressures could expect some measures which would alleviate some of the pains and provide some stability.
Pharma -The sector has had a mixed experience in Covid times and some pressures are seen and there is a growing expectation that some R&D breaks could be the right stimulus to boost exports and take advantage of supply chain disruptions in China. Enhanced outlay under the PLI schemes could be expected.
Hardware manufacture-India has been in the forefront as far as software goes but lags behind in hardware manufacturing capabilities which has also seen steep rise in computers, laptops etc in the past few months further aggravated by the semiconductor shortage. The budget could be expected to address the issue which will hasten self-sustenance to begin with.
Salaried class –This segment has been voicing concerns and demanding increased exemption limits under Section 80C, medical exemption under 80D which is woefully low as well as rationalization of income tax slabs which will boost the disposable income of the common man. With GST collections also improving this could be an area to be explored as this would also improve consumption and boost the economy at large.
MARKET OUTLOOK.
Some technical cues are as follows going by market trends: –
NIFTY-The index saw some selling pressure and despite banking counters holding on FMCG, pharma and metals saw selling pressure and on the eve of budget the index is approaching 200-DMA of 16640. Going into budget a neutral stance should be taken as volatility would be huge. Depending on individual expectation one could buy 16800(113) strikes put or 17400 strike call (125). In any case hedging of portfolio is advised by buying a 17000-strike put available at 178.
BANK NIFTY -The index was relatively strong but could be expected to be very volatile going into budget. It has bounced back from its 200 -dma of 36100. Depending on individual expectation one could buy 36800(300) strike put or 38500 strike call (365).
Trade with caution and look to book some profits on the eve of budget.
Have a great trading week!
Saw
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam