Anil Singhvi Market Strategy May 16: Important levels to track in Nifty50, Nifty Bank today

Anil Singhvi Market Strategy: Zee Business Managing Editor Anil Singhvi expects support for the headline Nifty50 index to emerge at 22,075-22,150 levels and a strong buy zone at 21,950-22,050 levels on Thursday, May 16.

For the Nifty Bank, he expects support to come in at 47,325-47,525 levels followed by a strong buy zone at 46,975-47,075 levels.

Here's how Anil Singhvi sums up the market setup:

• Global: Positive

• FII: Negative

• DII: Positive 

• F&O: Neutral

• Sentiment: Positive

• Trend: Positive

He expects a higher zone for the headline index at 22,300-22,365 levels and a strong sell zone at 22,400-22,475 levels.

For the banking index, he expects a higher zone at 47,950-48,075 levels and a strong sell zone at 48,200-48,350 levels.

Why did Wall Street clock a fresh high?

• Core inflation at three-year low
• Retail sales data weaker than expected
• Almost no possibility of a hike in interest rates
• In fact, hopes of lower rates gathering steam
• It is a second time when trades are moving contrary to expectations post-Fed signals

Editor's Take 

• Strong signals from Wall Street to support Dalal Street 
• Easing concerns about the outcome of Lok Sabha polls
• Market gaining some confidence in four days
• Midcap and smallcap stocks recovering in some relief to investors
• Only one problem on Dalal Street: Rapid FII outflow
• They have net withdrawn Rs 36,375 crore from the cash segment in 10 days
• 10-day FII outflows at Rs 60,000 crore across cash, index and stock futures segments
• No issue as long as Nifty50 and Nifty Bank honour 22,000 and 47,300 levels on a closing basis, respectively 
• Buying momentum to increase once indices close above 22,300 and 48,000 levels 

ANIL SINGHVI MARKET STRATEGY  

• FII index longs at 28 per cent vs 30 per cent 

• Nifty put-call ratio (PCR) at 0.92 vs 1.02

• Nifty Bank PCR at 0.79 vs 0.80

• Volatility index India VIX unchanged at 20.23

For existing long positions:

• Nifty intraday and closing stop loss at 22,050

• Nifty Bank intraday and closing stop loss at 47,300

For existing short positions:

• Nifty intraday and closing stop loss at 22,300

• Nifty Bank intraday and closing stop loss at 48,000

For new positions in Nifty:

• The best range to buy Nifty is between 22,050 and 22,150 with a stop loss at 21,950 for targets of 22,200, 22,265, 22,300, 22,350, 22,400, 22,450, 22,475

• The best range to sell Nifty is 22,300-22,400 with a stop loss at 22,500 for targets of 22,225, 22,200, 22,150, 22,100, 22,075 and 22,050

For new positions in Nifty Bank:

• The best range to buy Nifty Bank is 47,325-47,525 with a stop loss at 47,200 for targets of 47,600, 47,675, 47,750, 47,850 and 47,925

• Aggressive traders can buy Nifty Bank with a strict stop loss at 47,475 for targets of 47,850, 47,925, 48,000, 48,075, 48,200 and 48,275

• Aggressive traders can sell Nifty Bank in the 47,950-48,075 range with a strict stop loss at 48,200 for targets of 47,850, 47,750, 47,675, 47,600, 47,525 and 47,425

F&O ban update

• New in ban: Granules, Biocon, LIC Housing Finance, India Cements
• Out of ban: Canara Bank
• Already in ban: Birlasoft, Piramal Enterprises, Hindustan Copper, Zee Entertainment Enterprises, SAIL, Balrampur Chini, GMR Airports, Vodafone Idea

Results Reviews

Berger Paints 

• Results below estimates
• Big miss on margins but management commentary very strong
• Stock down 14 per cent in three months
• Berger Paints futures appear to have support at Rs 470 and Rs 465, and a higher level at Rs 492

LIC Housing Finance

• Results a mixed bag
• Profit below estimates
• Strong disbursement up 14 per cent
• LIC Housing Futures have support placed at Rs 617 and Rs 610, and higher levels at Rs 637 and Rs 645

Stocks of the Day

Sell Dixon Tech futures with a stop loss at Rs 8,200 for targets of Rs 7,850, Rs 7,700 and Rs 7,550

• Results below estimates on all parameters
• Weak operational performance
• Management commentary not very strong
• Stock ran 27 per cent in three months

Buy Thomas Cook shares with a stop loss at Rs 216 for targets of Rs 227 and Rs 230

• Company turned into profit from loss
• Strong operational performance

Buy Mankind Pharma shares with a stop loss at Rs 2,170 for targets of Rs 2,230, Rs 2,280 and Rs 2,300

• Strong all-round performance
• Margins up to 24.2 per cent from 20.3 per cent

Go Digit Insurance IPO: What should you do?

The market guru suggests participants avoid the issue and consider buying post-listing only after listening to the management's outlook on future business growth. He has identified the following key points about the listed space-bound company. 

Positive

• Experienced promoters
• First non-life Indian insurance co. fully operating on cloud
• Good FIIs as anchor investors
• King Kohli and Anushka Sharma invested in the company

Negative:

• Loss making track record
• Turned profitable only in FY23 with a very small profit   
• Highly dependent on motor vehicle insurance business
• Highly expensive valuations on present financials
• FY23 PE at 668 times. 9MFY24 PE at 145 times
• ICICI Pru and new India trading at much lower valuations
• RoNW much lower than industry levels at just 1.53 per cent
• ICICI Pru much higher at 16.64 per cent
• Solvency ratio too lowest among competitors
• Commission ratio abnormally high compared to peers
• Only unknown fact is if company can grow much faster than peers to reach to a reasonably big size

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