Nifty’s biggest positive catalyst: Tumbling oil prices at $68 a barrel.

*Morning Action @ 7 AM – Thursday, November 14th 2024*

# Our call of the day suggests that the benchmark Nifty shall struggle for direction.

# The biggest wall of worry continues to be persistent FIIs selling. Please note, FII exodus crosses Rs 27,600 crore this November.

# The trading theme shall also revolve around the US dollar index which has surged to 106.4, the highest since October 2023, as investors reacted to an inflation report that met expectations.

The dollar has gained from “Trump trades,” with markets betting on robust US economic growth and potentially inflationary policies when Donald Trump returns to office on Jan 20th which could constrain the Fed’s ability to cut interest rates.

*7:00 AM GLOBAL UPDATE:*
# GIFT Nifty 🇮🇳: (-10, 23634)
# Dow Futures: (+35, 43993)
# Nasdaq 100 Futures (+9, 21044)

# Nikkei (+159, 38881)
# Hang Seng (-197, 19626)

# Dow Jones (+47, 43958)
# Nasdaq (-51, 19231)
# Bovespa (+36, 127734).

 

WHAT EXACTLY HAPPENED AT WALL STREET IN OVERNIGHT TRADE:*

# Wall Street ended mixed as traders reacted to October CPI which increased 0.2% month over month, the same rate seen in each of the previous three months. The reading matched streets’ expectations.
# As of November 13, futures traders assigned an 82% probability to the Federal Open Market Committee (FOMC) cutting the short-term federal funds rate by 25 basis points (bps).

# At the closing bell, the blue-chip Dow Jones added 0.1% to 43,958, while the broader S&P 500 was essentially flat at 5,985. The tech-heavy Nasdaq Composite fell 0.3% to 19,230.

# The post-election Donald Trump victory is seen taking a breather, hitting the pause button.

# Traders now await:

1) Thursday, November 15: Fed Chair Jerome Powell speech.

# The US dollar index surged to 106.4, the highest since October 2023, as investors reacted to an inflation report that met expectations.

The dollar has gained from “Trump trades,” with markets betting on robust US economic growth and potentially inflationary policies when Donald Trump returns to office on Jan 20th which could constrain the Fed’s ability to cut interest rates.

# COMEX Gold drops towards $2567 per ounce, the lowest in one month, amid pressure from a rally for the US dollar.

# WTI crude oil futures slips towards $68.03 per barrel as concerns about weak demand from China weighed on the market.

MARKET TRENDS:
# Global: Negative
# FII: Negative (-2502.58 Cr)
# DII: Positive (+6145.24 Cr)
# Sentiment: Risky
# Market Breadth: Negative
# Technicals: Lower high/low
# F&O: 23000 – 25000 zone.

# INDIA VIX 15.43 (+5.76%)
# Nifty PCR (28th Nov) 1.04
# Bank Nifty PCR (27th Nov) 1.13

# Nifty Outlook: The bears are likely to be everywhere.

# WHAT TECHNICALS TELLS US ON NIFTY & BANK NIFTY:

Nifty Technically:
Nifty (CMP: 23559)
SUPPORT: 23167/21281
RESISTANCE: 23850/24337
RANGE: 23300-23750
BIAS: Neutral
21 DMA: 24339
50 DMA: 24929
200 DMA: 23545

Bank Nifty Technically:
BANK NIFTY (CMP 50088):
SUPPORT: 49283/46077
RESISTANCE: 50801/52201
RANGE: 49000-50500
BIAS: Neutral
21 DMA: 51564
50 DMA: 51917
200 DMA: 49724

NEED TO KNOW:

# Tumbling oil prices at $68 a barrel is the biggest positive catalyst.

# Having said that, Nifty is unlikely to go anywhere with markets assessing bearish outlook amidst FII exodus crossing Rs 27,600 crore this November.

Please note, the FIIs camp have pulled out a record Rs 1.2 lakh crore from Dalal Street since Nifty hit its peak at 26277 mark on September 27th.

# Net-net, massive destruction to Nifty bulls’ confidence witnessed after Nifty slipped below 200-DMA in yesterday’s intraday trade.

# Well, Nifty is down around 10% from its peak.

# The Gyan Mantra: Caution will Continue to be the Buzzword.

# The Q2 results to trickle in today, Thursday, November 14th:
AVANTI FEEDS
BDL
BHARAT FORGE
GRASIM
HAL
IPCA LABS
ITDC CEMENTATION
JYOTI CNC
LEMON TREE
MUTHOOT FINANCE
SWAN ENERGY.

# Now, here is our preferred trade on Nifty and Bank Nifty:

Nifty (23559): Sell at CMP. Stop at 23951. Targets 23450/23167. Aggressive targets at 21281-21500 zone.

Bank Nifty (50088): Sell at CMP. Stop at 52301. Targets 49700/49283. Aggressive targets at 46100-47000 zone.

# Our chart of the day is bearish on AXIS BANK, VOLTAS, NMDC and REC on any intraday strength with an interweek perspective.

# The 1 Stock to Sell Right Now: Sell VOLTAS (CMP 1685): Sell at CMP. Stop at 1795. Targets 1617/1559. Aggressive targets at 1513. (Interweek Strategy). Rationale: Overbought technical conditions. Momentum oscillators turning in bearish mode. Massive breakdown on the daily charts on cards. Key hurdles 1793.

 

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