WEEKLY TRENDSETTER (APRIL 1ST,2022)
| 2022 | Mar 18 | March 25 | Ch % |
| NIFTY | 17287 | 17153 | -0.49 |
| BANK NIFTY | 36428 | 35410 | -2.79 |
| USD/INR | 75.80 | 76.20 | 0.53 |
MARKET REVIEW–The week was a bit of an anti-climax after a stellar performance in the previous week, as gains were quickly sold into and the market was in a range.
INTERESTING TIDBITS
VI enters into value adding sectors which could stabilise earnings
Vodafone Idea has now come up with its gaming service – Vi Games, following the launch of its music streaming service. The focus is to move towards monetisation, leading to an increase in average revenue per user (ARPU). In India, gaming is one of the biggest segments in the entertainment category with estimates to reach 500 mn users within 2022.The company has been going through critical times with several issues like AGR, low tariffs, OTSC, refund of IT and GST dues still remaining unaddressed. While the sector has great promise, the company needs a game changing boost which will help come out of difficult times.
Indian pharma companies may replace Western manufacturers in Russia
India has been under tremendous pressure to choose a side in the ongoing conflict as the West continues to impose harsher sanctions on Russia to punish it over the Ukraine invasion. However, after oil concessions from Russia which comes after crude is trading at $110 per barrel, the other industries like pharma could be looking to cater to Russia as US and its allies boycott any supplies. The current situation still looks critically poised and longer it lasts, more it will hurt oil importing countries like India.
Gas distributing stocks near March 20 lows
The high LNG prices have been hurting companies like IGL and MGL which have seen the stocks underperforming and currently trading at March 20 lows. While near term uncertainty remains, these companies with strong retail distribution in place could turn out to be value plays once situation normalizes. The stocks are trading at highly oversold levels.
An interesting comparison of similar levels were seen in mid-2017 when the markets were in fine fettle. However, pharma was an exception and the industry was underperforming as a whole. Stocks like Divis had dipped to 600, Sun Pharma to 325, Dr Reddy’s to 2100. Subsequently, there was a strong resurgence in the prices and most have them have seen stellar gains. As the saying goes “Form is temporary, class is permanent”.
MARKET OUTLOOK
Some technical cues are as follows going by market trends: –
NIFTY-The index saw 17000 acting as a good support as buying emerged in the 17000-17100 zone. The 17050 should act as a support in the coming week as well as a cluster of parameters converge there including the 200-DMA.
BANK NIFTY-The index behaved on expected lines as after a sharp surge in the previous week profit taking emerged around 36700 and the index settled at 35410.A gap at 33969-34218 could be revisited and levels of 36000-36200 could act as a resistance.
SCRIPS TO WATCH OUT
JSW Steel (721) –The scrip is been in a narrow band for the last few months but looks set to break past its previous high of 780.Ideally levels of 700-710 should act as a good support level. Buying at declines could be considered.
Indian Hotels (227)-The hotel sector is on a strong comeback mode and this leader of the industry looks poised to cross levels of 250 in the coming days. Ideal levels for buying would be 210-15 where good support exists.
Have a great trading week!
Note: Any queries /clarifications may be addressed to stockmasala@gmail.com .
Krish Subramanyam