Euphoria Subsides in HDFC Twins & Indices Lose Key Levels

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Euphoria Subsides in HDFC (NS: HDFC ) Twins & Indices Lose Key Levels [5-4-22]

O 18080.60

H 18095.45

L 17921.55

C 17957.40/-96.00/-0.53%

BANK NIFTY EOD 38067.90/-567.30/-1.47%

SGX NIFTY at 1820h -06

India VIX 18.49/+3.24%

FII DII data +480 Crores

NIFTY TOP 5 CONTRIBUTORS

Leaders 52

Laggards 148

Net -96

BANK NIFTY TOP 3 CONTRIBUTORS [Please read Insight #10]

Leaders 004

Laggards 495

Net -491

CHART BASED DETAILS ARE AVAILABLE IN THE FOLLOWING VIDEO:

https://youtu.be/BJoqG5OBmEs

POSITIVES

From the heavyweights, only TCS (NS: TCS ) ended in the green.

FIIs and DIIs ended the day as Net Buyers today as well.

NEGATIVES

India Vix is back up above 18.4.

Except for TCS, all index heavyweights ended in the red.

INDEX SUPPORT & RESISTANCE LEVELS

It is better to wait & observe how the week ends as the euphoric rise has distorted the real levels of the indices.

TRADING INSIGHTS & OBSERVATIONS

  1. As expected, the euphoria around the HDFC twins’ price action started fading and that is natural. It is hard for any scrip to sustain higher price levels merely on account of the news.
  2. Since HDFC Bank (NS: HDBK ) was accompanied by Kotak Bank in the rise yesterday, today, Kotak Mahindra Bank Ltd (NS: KTKM ) also fell and therefore, Bank Nifty is appearing weaker than Nifty .
  3. In fact, today Nifty is under pressure on account of Reliance (NS: RELI ) & Infosys (NS: INFY ) both falling further from the close of 4-4. I had mentioned in the earlier post that for Nifty to move up further or remain above 18000/17900, these two giants should not start slipping away.
  4. Between 1000-1100H, the indices were caught in between resistances and have been moving in a narrow range. A breakout or breakdown is in the offing and I think the indices may just continue from where they left only if they are able to clear and sustain the close of 4-4-22 which is likely to act as a resistance.
  5. And this tussle between the bulls & the bears continued for one more hour as Nift now managed to get back up above 18000, but was unable to go beyond A 20-point range. Now the indices may well decide to wait for the FTSE to start trading within half an hour or so and then take the cues from it and decide which way they are likely to trade in the PM session.
  6. TCS has been showing steady moves on the way up which is a good sign as Infosys continues to remain under pressure. Now that the buy-back is over, the euphoria around its price action is over so it is no more a technical and Q4 numbers-related move that it is likely to witness.
  7. Speaking of the Q4 numbers, yesterday it was reported that HDFC twins’ Q4 numbers were also good. I do not know how they were able to share the numbers so ahead of time or it was just another speculation to let the prices move up?
  8. If we look at Infosys’ price action so far ahead of the Q4 numbers, it appears to be getting ready for a mediocre result or there is some unexpected item that is likely to come up around its results date. It is prone to experiencing pressure from external sources around its result days.
  9. FTSE opened flat to slightly negative and this made it hard for the bulls as Nifty kept crossing 18000 on the downside and then bouncing back up and then doing the same thing over and over again.
  10. When 5 of the heavyweights are trading in the red, this is what we can expect and for the indices to start trading above the close of 4-4, the draggers would need to at least stay neutral. That alone would change the sentiment to a great extent.
  11. And as what usually happens on such days of narrow range moves with index heavyweights in red, India Vix has gone back up above 18 and is now up almost 3%. This is not a good change that has taken place today.
  12. When the clock struck 1300h, Nifty found the lost positivity and in a steady rise over the next half an hour, it went by 70+ points. However, it could clear one of the intraday resistances around 18075 and retested the support area below 18000.
  13. And then, in the last 90 minutes of power play, the bears went home smiling as Nifty fell 150+ points and ended just above 17950. Both the indices have now erased almost 1/3rd of the gains made yesterday - another down day, and we could be closer to where we were on 1-4-22.
  14. Nifty is down by 96 points & the entire contribution is from the top draggers [net of lifters]. Similarly, Bank Nifty is down by 567 points and the net contribution of the top 3 is -491.

This post is shared purely for Educational & Informational purposes only.

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