Market M00D on Monday

On Monday 09 July 2024, the Indian stock market will likely be influenced by a combination of global and domestic factors. Finance Minister Nirmala Sitharaman will present the highly anticipated Union Budget on July 23, 2024. The government changing in Britain can create a degree of uncertainty in the global markets. Investors might adopt a cautious approach, awaiting the results and potential policy changes. Any significant developments in the UK’s political landscape can impact global investor sentiment, including in India.

Global Calendar

Date	Country	Events
Tuesday, July 9, 2024	USA ***	Fed Chair Powell Testimony
Wednesday, July 10, 2024	USA ***	Fed Chair Powell Speech
Wednesday, July 10, 2024	India **	M3 Money Supply YoY (Jun/28)
Wednesday, July 10, 2024	China **	Inflation Rate MoM (Jun)
Wednesday, July 10, 2024	China **	PPI YoY (Jun)
Wednesday, July 10, 2024	China **	New Yuan Loans (Jun)
Thursday, July 11, 2024	Britan ***	GDP MoM (May)
Thursday, July 11, 2024	USA ***	Inflation Rate MoM (Jun)
Thursday, July 11, 2024	USA ***	Inflation Rate YoY (Jun)
Thursday, July 11, 2024	USA ***	Core Inflation Rate MoM (Jun)

Market Sentiment

Global Economic Data: Releases of economic data from major economies, such as the US, China, and Europe, will be closely monitored. Indicators like inflation rates, employment figures, and manufacturing indices can influence global market trends and, in turn, the Indian market.

Geopolitical Events: Any significant geopolitical events or developments, such as trade tensions or conflicts, can also affect market sentiment.

Domestic Factors

Indian Budget: The upcoming budget in the third week of July is a significant domestic event. Market participants will be keenly watching for any announcements related to fiscal policies, government spending, and reforms. Speculation and expectations around the budget can lead to increased market volatility.

Corporate Earnings: As the earnings season continues, the performance of major Indian companies will be scrutinized. Positive or negative surprises in earnings reports can impact investor sentiment and stock prices.

Volatility: Given the multiple factors at play, the market may experience heightened volatility. Investors might prefer to stay cautious, adopting a wait-and-watch approach.

Sector-Specific Movements: Certain sectors might react more strongly to specific events. For instance, financials and infrastructure sectors could be sensitive to budget-related announcements, while export-oriented sectors might react to global economic data and geopolitical developments.

National Stock Exchange (Nifty50)

Recent Performance

• Last Week’s High: 24,401
• Last Week’s Low: 23,992
• Expected Resistance Level: 24,500 (where call volume has changed by 20%)

Technical Indicators and Analysis

Support and Resistance Levels:

• Support Level: The recent low of 23,992 acts as the immediate support level. If the Nifty 50 moves down, this level will be critical for determining whether the index can stabilize or might move lower.
• Resistance Level: The recent high of 24,401 is a short-term resistance level. The key resistance level to watch is 24,500, where significant call volume change indicates strong selling pressure or interest in this level.

Volume Analysis:

• Call Volume at 24,500: A 20% increase in call volume at this level suggests that many traders expect the index to face resistance here. This volume change indicates that there might be strong selling pressure or a significant number of traders betting against the index moving past this level easily.
• Call Volume at 25,000: A 16% increase in call volume at 25,000 also suggests that traders see this as a major resistance level. If the index manages to cross 24,500, the next major resistance would be around 25,000.

Moving Averages:

50-Day Moving Average (50-DMA): Check if the index is above or below this average. Being above the 50-DMA generally indicates a bullish trend, while being below it indicates a bearish trend. 200-Day Moving Average (200-DMA): This long-term moving average is crucial. A cross above the 200-DMA suggests a long-term bullish trend, while below indicates a bearish trend.

Trend Analysis:

Uptrend Confirmation: For the uptrend to continue, the index needs to break above the resistance at 24,500 convincingly, ideally with strong volume. Downtrend Risk: If the index fails to break 24,500 and starts moving down, watch for support at 23,992. Breaking this support could indicate a further downside.

Summary of Expected Movement

Bullish Scenario: If Nifty 50 breaks above 24,500 with strong volume, it could move towards the next resistance level around 25,000. Positive market sentiment, strong corporate earnings, and favourable domestic and global economic indicators can support this upward movement. Bearish Scenario: If the index fails to break 24,500 and moves downwards, the immediate support level to watch is 23,992. A break below this level could lead to further downside, potentially testing lower support levels.

SECTOR ROTATION

Based on current market conditions, here are some sectors and specific stocks that may perform well in the coming week:

Information Technology (IT)

HFCL, Syrma, Accelya

Pharmaceuticals

Sun Pharmaceutical Industries, Cipla, Dr. Reddy’s Laboratories

Consumer Goods

Hindustan Unilever, ITC, Nestle India, LTFoods

Energy and Oil & Gas

Reliance Industries, ONGC (Oil and Natural Gas Corporation), Indian Oil Corporation

Automobile

Maruti Suzuki, Mahindra & Mahindra, Precam

Infrastructure and Construction

Larsen & Toubro, UltraTech Cement, Dalmia Bharat

Metals and Mining

Hindalco Industries, JSW Steel, SHYAMMETL

Disclaimer: The stock market analysis provided herein is based on non-technical factors such as market sentiment, news, and macroeconomic trends. This information is intended solely for educational and informational purposes and should not be construed as financial advice, an investment recommendation, or an endorsement of any particular investment strategy or stock. The analysis reflects the opinions of the author(s) and is subject to change without notice.