We are in the final weeks of 2024 and barring the Fed FOMC this week, there are no major known triggers for the markets. What trade do charts suggest and how should traders/investors prepare?
Markets have been witnessing consolidation over the past few weeks, post the sharp recovery from its recent low witnessed on November 21. Overall, lack of clear triggers on the back of FII sell-off which appears to have waned recently, corporate earnings slowdown, inflationary concerns, bullish momentum in US stock markets, are some of the factors playing out in the markets.
Overall, Nifty appears to be strongly supported around the recent low, with 23,200-23,400 to act as a short-term bottom, whereas upside resistance is seen around the 24,800-25,000 zone. Short-term biases are favouring the bulls, but all investors’ eyes are fixated on the US FED FOMC slated later this week, hence investors are advised to stay cautious.
What levels do you see for Nifty and Bank Nifty?
Both the benchmark indices, Nifty and Bank Nifty, have displayed resilience of late, with bulls attempting to gain an upper hand, post the sharp correction in both the indices, from their all-time highs witnessed in the last week of September.
While on one hand, Nifty is down 4% this quarter, Bank Nifty is up 1.14%, clearly indicating the outperformance of the banking stocks versus other sectors. Going forward, Nifty would need to sustain above the 25,000 mark for any meaningful rally, towards the next target of 25,400 levels.
Bank Nifty on the other hand, has immediate resistance around the 53,800-54,000 mark whereas support is seen around the 52,300-52,500 zone. Despite all the headwinds and problems cited from time-to-time by experts and the industry insiders, IT’s 37% returns are still 2X of Nifty. What is your assessment of the sector for 2024 and if you have to pick IT stocks for 2025, which one will those be?
The Nifty IT Index has had a stellar run this year, with the Nifty IT Index, continuing to hit record highs, up 7% in December itself. Almost all IT stocks have witnessed sharp rally this month, with the industry heavyweight Infosys outperforming TCS. Receding fears post Trump’s re-election, uptick in the US economy, weakening Rupee, all appear to have added to the appeal of investors for the IT sector. Overall, this sector has stood the test of time, and going into 2025, the sector is expected to remain in the forefront. The only factor that can derail the applecart would be any significant downturn in the US economy. At current levels, investors would be well-advised to wait for a correction for fresh entry.
Private banks have underperformed this year and investors are now pinning hopes on February rate cut. Should top banks be in one’s portfolio if the view is short term i.e. 2-3 months?
When the overall growth of the Indian economy is witnessing a slowdown, and key concern being raised in the growing imbalance between credit and deposit growth, competition amongst banks to shore up their deposits, are likely to impact their overall profitability in the medium to long-term.
Overall, the banking sector has witnessed sharp growth over the past couple of years but the times ahead are likely to be challenging, to say the least. However, leading private sector banks such as ICICI Bank, HDFC Bank, are few stocks that can form part of any investor’s long-term portfolio. However, from a short-term perspective, we could witness price movements, based on central banks events, both the RBI & the US Fed, hence investors are advised to stay cautious.
India’s GDP fell to a 7 quarter low and we are hearing significant challenges related to domestic consumption and that has shown in the performance of FMCG stocks. Is that a no go area in the near-to-medium term or do you see corrections as a buying opportunity given valuations are down now?
Most of the FMCG stocks, the likes of Britannia, Hindustan Unilever, ITC, Nestle India, Tata Consumers, Colgate Palmolive, Dabur, Godrej Consumer Products, have witnessed price corrections, varying from 10% to as much as 25%, clearly indicating the overall weakness in demand in this sector, post the slowdown in the Indian economy.
Most of the FMCG stocks have seen a significant decline in valuations, and investors could take a closer look at some of them, but with a long-term view. In the near to medium term, ideally waiting for India’s GDP growth over the current quarter is going to be an important data point to consider, given that the slowdown has been significant, across various industry segments.
ITI, Delhivery and Jupiter Wagons grabbed eyeballs with big rallies while GCPL and Honasa were among the worst losers? What should investors do with them?
ITI, Delhivery and Jupiter Wagons gained 12%, 10% and 13% WoW respectively, clearly rewarding its shareholders. Investors in ITI can book part profits and hold the rest as resistance is seen around the 400 mark whereas support for ITI is around the 320 level. Investors in Delhivery & Jupiter Wagons, too can book part profits and trail the rest below 430 and 520 respectively, as these are crucial support levels.
On the losing side, GCPL lost 10% while Honasa lost 7% WoW, on the back of selling pressure. Investors can hold their positions in GCPL with crucial support seen around the 1,050-1,070 zone and a rally to materialize only when the stock sustains above the 1,200-1,220 mark. Honasa, is clearly in a downtrend and is attempting to form a bottom with crucial support seen around the 220 mark. Investors can hold onto the stock as long as this level is not breached, and for any meaningful rally, the stock will have to sustain above the 280-290 mark.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
