For the weekend 16th Jul'21-Friday... Updated on 11.07.21, Sunday-11.55 am

Last week Nifty trend: Nifty Index last week, opened on a positive note at 15793.40; on opening move, it made a high at 15914.20 on Tuesday, thereafter it moved down the rest of the days and made a weekly low 15632.75 on Friday and closed the week at 15689.40 on a negative note with a weekly loss -32.40 points i.e., -0.21%. 

Sector wise performance: Last week, the sectoral indices given mixed performance with 50:50. On a negative side, Nifty Auto was leading with a weekly loss by -2.48%, followed by Nifty IT lost -1.19%, Nifty Pharma lost -1.17%, Nifty Energy lost -0.93%, finally the Nifty FMCG lost marginally by -0.09%. On the other hand, the Nifty Realty was leading the weekly gain by 6.25%, followed by Nifty Metal gained 2.80%, Nifty Financial Services gained 0.92% and Nifty Bank marginally gained by 0.75%. Likewise, Nifty Midcap Index closed on a positive note with a weekly gain by 1.34% and Nifty Smallcap Index also closed with a weekly gain by 1.24%. 

Institutional Investors trading data: The Foreign Institutional Investors-FII's last week, continued as a net seller in the Equity segment, they sold to the tune of Rs.2028.36 crore on the net basis; whereas, the Domestic Institutional Investors-DII's, continued as a net buyer, they bought marginally to the tune of Rs.92.46 crore on the net basis, as per the data forwarded to the SEBI, we must watch the FIIs/FPIs behaviour this week, whether they continue the funds outflow or not.

USD Vs INR: The USD Vs INR opened near $74.52, made a weekly low at $74.02 on Tuesday; thereafter, it moved up and made a weekly high till $74.88 and closed the week with a negative note at $74.48, This week, the USD Vs INR should move above $74.58-74.63, if moves and sustain above $74.63 then, the USD may re-test $74.90-74.95-75.12-75.27-75.40-75.65 levels. On the other hand, if the USD moves below $74.35-74.23, then it may re-visit $74.12-74.08-74.02-73.90-73.79-73.69 in the near term. 

Key Events: No major key events are expected this week on the global front as well as on the domestic front, except the India Inc. Q4(Jan-Mar'21) remaining corporate results, Q1(Apr-Jun'21) results, Indian IIP data, Indian Inflation data and Covid19 developments, we must watch this week. 

Q4 Earnings: The India Inc. Q4(Jan-Mar'21) corporate results, so far 3753 out of 4248 companies were declared their Q4 results, on a QoQ basis the Net profit continued in the positive zone by 47.90% when compared with last quarter i.e, the Net Profit of these 3753 companies were at Rs.204,170.80 crore Vs. Rs.138,010 crore (Q3-Sep-Dec'20). Likewise, on a YoY basis, the Net profit seen positive growth about 690.90% i.e., Rs.204,170.80 crore, last year these 3753 companies made a Net profit Rs.25,811 crore, the major changes in the Net Profit on YoY basis, solely based on the lower base effect, compares with March' 2020 to March'2021.

Q1(2021-2022) Earnings: India Inc. Q1 (Apr-Jun'21) results were kick started by the IT conglomerate TCS on 08th Jul'21, the Q1 numbers were not up to the street expectation on QoQ basis, the net profit for Q1 was Rs.9008 crore Vs. Rs.9246 crore (Q4-Jan to Mar'21) but, on YoY basis the net profit seen last year Rs.7008 crore, it was up by 28.54%. This week the major IT stocks Q1 results are expected, Infosys and Wipro may declare their results on 14th Jul & 15th Jul respectively. The Banking giant HDFC Bank may declare their Q1 results on 17th Jul, HDFC AMC and LT Finance may declare their results on 16th Jul, the IT majors Q1 performance and their dollar guidance for the Q2, may dictate further move on the Nifty Index for the ensuing weeks.

Covid19: The Covid-19 second wave has continuously been witnessed declining trend, as of today the country witnessed everyday covid positive below 50k, the number of active cases now at 454,118 the death toll rose to 408,040 the daily death rate also declined below 1000 in a day. We will have to wait and see the further developments, the lockdown relaxation already started, if the daily positive numbers are down steadily, maybe from July-August the normalcy may return, subject to the vaccination drive happens in a full swing (as on date, the vaccination status stands at 37.60 crore) and the third wave of the covid19.  

Crude Oil: Crude Oil price has come down from $77 to $70 per barrel and hovering around $74-75, the domestic Petrol & Diesel prices continued to move up across the country and it is sustaining above Rs.100 mark, since the International Crude price is steady at $74-75, though in a brief move had touched $70 and once again climbed to $75 and USD rates also hovering above $74 as against INR.

Price Earnings: The price valuation i.e, Price Earnings ratio-PE, has come down from the last week level, i.e., 28.33 times and settled on Friday at 28.27 times. The lower PE valuation around 28-29 times, is due to the India Inc.,Q4 good numbers.  

Advance & Decline (ADR) Ratio: Market breadth, in the overall NSE listed stocks, last week seen in a positive zone, out of 2058 stocks were traded daily on an average basis, 5115 stocks were advanced and 4838 stocks were declined, the ADR maintained 1.06 times. At the same time, in Nifty50 stocks, the ADR has been maintained at 0.91 times with 119 advances and 131 declines, this data infers that, the sell-off seen due to profit booking in Nifty50 stocks. 

F&O Cues: The Nifty future was settled at premium by 33.05 points from the last week premium level 19.35 points, the Nifty Futures Open Interest-OI seen in 9648400 when compared with the last week level i.e.,9298950. The PCR(Put/Call Ratio) has gone up from 0.97 to 0.91, the maximum PUT open interest seen in 15500 to 15300 strike price and CALL open interest seen in 15700-15900 strike price, it indicates that, the Nifty may face strong hurdle 15700-15900 this week and 15500-15300 may act as strong support.

This week Nifty Trend: The Nifty Index on Monday, may open with a positive note near 15710-15740, subject to the Asian Indices movement, if the Index moves above 15740 then the it may test 15780-15835-15885-15915, further move above 15915 then, the Index may test 15970-15990-16024-16070 levels. On the other hand, the Index not able to move and sustain above 15740-15780 then, it may try to re-visit 15655-15632 levels, further weakness below 15632 then, the Index may visit 15605-15560-15505-15450-15432-15400-15375 levels in the near term.  

Special Mention: Some weakness seen in the Nifty Index movement, due to the lack of confidence at higher levels i.e., 15900, it was tried twice to break our threshold levels i.e., 15920 but, it was unable to move above this level, the global weakness dragged the Index once again till 15635, the IIP, Inflation data and India Inc Q1-(April to June'21), corporate performance, may decide further move on the Indian Indices, especially, the Nifty Index, as wriiten last week, the Index may trade in a range bound move between 16000-15400 for some more trading sessions, further trend may emerge based on the domestic data, global sentiment especially the Crude oil price and the India Inc, Q1 numbers. If, the Nifty index moves below 15450-15430 then, the weakness may trigger further sell-off to drag the Index till 15250-15050 and any up move above 15920-15970 with a wider participation and good volume, may take the Nifty index to test 16000-16220 levels.

Trading Strategy: The Investor/trader may use the buy on dips strategy at 15600-15400 levels with a short term perspective to gain 5-15% on Nifty50 stocks.

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