Well, today is expiration day, a day when macro indicators are calling shorts and the market is under pressure. However, what we are currently witnessing is a very range-bound movement. What are the important floors to watch out for and what are the roofs on the market right now?
Rahul Sharma: Yes, the good thing about yesterday’s US event is that there will be no meaningful events for the next 15-20 days. That means market reaction is taken out of the equation. Given our current position, especially in the US market, we feel we need to outperform the US market going forward. Currently, 23,900 is a very important support for the market and in the first half of the year it managed to defend that level and Nifty managed to sustain above that level. Now, as long as this level is maintained, I am hopeful for a recovery from here. This means that there could be a sharp rebound. Just to be clear, Nifty has weekly expiry date today and the put option is 24,000. This is where there is a lot of open interest that was built going into yesterday’s session. Now, the important thing here is that structurally this is likely to continue to be a volatile market. This means that movements within a range are expected on a wider scale. Therefore, the downside is 23,900-24,000 and the upside is 24,800, which is where the market is expected to remain for the next 10-15 trading sessions.
Now, as we move into January and the quarterly numbers start to move, that could be one area where the market could look for new catalysts, and if the numbers beat expectations, it could point to a broader recovery in the market. should be required. Nifty may go back to 25,000 soon. Therefore, for now, we would like to focus on the 23,900 level based on the closing price. As long as it exceeds that, you’ll be fine.
How is the Pharma Index doing? This index has outperformed the market the last few times. Regarding the pharmaceutical index, a strong buying trend is indicated. What does it look like on the chart?
Rahul Sharma: Yes, absolutely. The pharma index has been very up in the last two sessions and will act very well as a defense in the 10-15 day period where we expect the broader market may not find the right direction. We think it is possible.
So at this level, the drug company looks pretty solid. In fact, today the pharmaceutical index exceeded 22,500 points. This means it is very likely that the pharma index will rise by about 800 to 1,000 points over the next month, and in fact, stock prices are also rising. Something that looks good from today’s perspective is also from Pharmapac. So one of our favorite stocks in this space is Mankind Pharma. Stocks bucked the trend and outperformed the index. We now feel that we are ready for further highs and can buy towards the upside target of 3150. We can expect an upside of about 10% to 12% from current levels and can place a stop loss at 3150. I think this stock can go for 2700. Another stock that looks good in this space is Torrent Pharma. This stock also comes from a recent consolidation, and technically speaking, it has the potential for another 10% to 12% upside from current levels, and you can buy today’s low as a stop loss.
So these are two names that look good in the pharma pack, and the pharma index, which should continue to perform well for at least the next few weeks, is what we have in mind.
But since Banknifty has been outperforming and now appears to be reversing a bit, will there be a bust like we are witnessing in Banknifty?
Rahul Sharma: This is why Nifty Bank is a cause for concern. Well, yesterday’s data is quite negative given the aggressive short build-up, as well as the low quarterly put-call ratio seen on Bank Nifty and the sharp rise in IV. It was something.
Therefore, it will definitely be unstable. However, if we look at the daily chart, there is a gap in the daily chart that formed on November 25th, so we believe today’s low around 51,200 will act as a bit of a respite.
As this gap closes around the 52,300 odd mark, we feel that the gap has largely closed today and that some stability should return to the banking index from these levels, at least structurally speaking.
Now, only the market will decide whether a V-shaped recovery will occur. But for now, the risk reward appears to be good. We think it’s a good time to accumulate long positions in the banking index, especially with a slightly broader outlook of at least a month or more.
