Nifty Dips: Bullish Repositioning or Short-Term Weakness?

Yesterday’s Pick

DABUR 30MAY24 570 CE 9250/- ( Per 2Lot )
MIDCNIFTY 03 JUNE 11650PE 30800/- (5 Lot

Nifty Technical View

The Nifty index created a bearish candlestick pattern on the daily charts, characterized by a lower high and lower low. The Nifty 50 declined during the last hour of trading amid ongoing volatility, marking its third consecutive day of downward movement. The index was unable to break through the 23,000 mark and ended just below 22,900. Investors opted to lock in profits, and bullish traders appeared cautious due to increasing volatility, which has reached a new two-year peak. The chart patterns also suggested that the upward momentum is fading, potentially leading to a price correction after the recent rally.

Indian Vix

Volatility surged to a new two-year high on Tuesday, particularly in anticipation of the exit polls and Lok Sabha election results. It’s expected to stay elevated until the conclusion of the election. The India VIX increased by 4.32 percent, reaching 24.20, the highest closing level since May 25, 2022.

FII And DII Data

Foreign institutional investors (FIIs/FPIs) purchased Indian equities with a net buy amounting to Rs 65.57 crore on May 28. In contrast, domestic institutional investors (DIIs) bought equities worth Rs 3,231.67 crore during the same period.

Put Call Ratio

The Nifty Put-Call ratio (PCR), a key indicator of market sentiment, fell to 0.94 on May 28 from 1.02 in the previous session. A rising PCR, or a ratio above 0.7 and particularly over 1, suggests that traders are selling more Put options than Call options, typically signaling a bullish market sentiment. Conversely, if the PCR drops below 0.7 or approaches 0.5, it indicates higher selling in Call options than in Puts, reflecting a bearish market sentiment.

Stocks in the news

Indian Railway Catering and Tourism Corporation Ltd (IRCTC )

Indian Railway Catering and Tourism Corporation Ltd (IRCTC) reported a net profit of Rs 284 crore for the March quarter of FY24, a 2 percent increase from the same period last year, driven by higher ticket sales. The company’s revenue rose 20 percent to Rs 1,154.8 crore, according to a regulatory filing on May 28. However, both revenue and profit figures fell short of analysts’ expectations. Prabhudas Lilladher had anticipated a net profit of Rs 306.5 crore, reflecting a 21.2 percent year-on-year increase (though a 2.5 percent decline quarter-on-quarter). They also expected net sales to rise by 17.2 percent year-on-year (up 1.1 percent quarter-on-quarter) to Rs 1,130.8 crore.

Grasim Industries:

Birla Group Holdings Private Limited (BGHPL), a major promoter of Grasim Industries, has increased its stake in the company from 19.10 percent to 23.18 percent, according to a regulatory filing on May 28. This increase follows the amalgamation of Umang Commercial Company Private Limited and other entities with BGHPL, as approved by the National Company Law Tribunal (NCLT), Grasim stated in the filing. In a formal communication dated May 28, BGHPL informed Grasim Industries that its shareholding has risen from 12,99,73,507 equity shares to 15,77,82,973 equity shares. Despite this increase in BGHPL’s shareholding, Grasim clarified that the overall shareholding of the promoter and promoter group in the company remains unchanged.

Nifty and Bank Nifty Support and Resistance level

Resistance 22,970, 23,000, and 23,055
Support based 22,860, 22,830, and 22,775

Resistance 49,410, 49,520, and 49,700
Support 49,055, 48,945, and 48,765

Index Future levels

Nifty Futures Buy above 22850. The suggested targets for this are 23,200 and 23,300, with a stop loss set at ,22,650.

Bank Nifty future buy above 48900 index is expected to up side levels of 49300 and 49400 and level 48550 will act as a stop loss.

Fundamental Pick : HDFCAMC

Buy at ₹4320, target ₹4350, stop loss ₹3867

HDFC Asset Management Company Ltd, a leading asset management firm in India, was incorporated in 1999 and serves as the investment manager for HDFC Mutual Fund. The company focuses on offering innovative investment solutions to its clients, managing a diversified portfolio that includes equity, debt, and money market instruments. HDFC AMC also provides a variety of services, such as portfolio management, financial planning, and advisory services. Among its top products, HDFC AMC offers a wide range of mutual fund schemes, including equity funds, debt funds, and liquid funds. Some of its popular brands are HDFC Top 100 Fund, HDFC Balanced Fund, HDFC Small Cap Fund, and HDFC Tax Saver Fund.

HDFC Asset Management Company reported a 44% year-on-year increase in consolidated net profit for the quarter ended March 31, 2024, with profits rising to Rs 540.84 crore from Rs 376.17 crore in the same period last year. The company’s revenue from operations for the quarter was Rs 695.43 crore, marking a 3.60% increase from Rs 541 crore in the year-ago period. Sequentially, profit after tax (PAT) increased by 11% compared to the Rs 487.92 crore reported in Q3FY2024, while revenue rose by 3.60% from Rs 671.32 crore in the previous quarter.

Happy Trading!

Commodity Samachar
Learn and Trade with Ease

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