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.

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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  • They have net withdrawn Rs 36,375 crore from the cash segment in 10 days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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