Markets witness a sharp reversal in FII flows on Monday with FIIs turning into net buyers in both cash and derivatives markets forcing the Nifty to close above 16,600.
The formation of a ‘bullish flag’ in the spread of the Nifty 50 Index and Nifty 500 Index indicates reallocation from broader markets to Nifty 50 Index and this may force the Nifty to move higher to 19,867 while broader markets may see underperformance.
Adding to it, Bank Nifty has also positioned for a major upmove after it completes the ‘Bullish Inverted Head & Shoulder’ pattern with a potential target of 45,000.
The drop in India’s VIX below 20% also reinforces bullish momentum for markets and we expect India’s VIX to decline towards 9% in the near term. Overall setup for the market is positioned for Nifty hitting 19,867 in a 1-2 months period with an immediate target seen at 17,200.
Bank Nifty & Spread of (Nifty 50- Nifty 500) Index
Stocks to watch
Positive Read Through
- IRCTC 4Q Net Income Rs 2.14b vs. 1.04b YoY, beats est. 2.08b; Revenue 6.91b vs. 3.39b YoY
- LIC of India 4Q Net Income Rs 2.37B Vs. 2.35B Rupees Q/Q Gross NPA 6.03% vs 6.32% q/q; Dividend Rs 1.50 /share
- M&M Sell 3,32,195 Shares and 100 Compulsorily Convertible Preference Shares held by the Company in TVS Automobile for Rs 450m
- ONGC, OIL- Crude at 2-month high, EU to curb Russian imports
- Sun Pharma- margin at 24.8% vs 24% YoY, US sales at USD 389 mn vs USD 397 mn QoQ
Negative Read Through
- Delhivery 4Q Net Loss Rs 1.2B; Revenue 20.7b
- Dish TV India 4Q Net Loss Rs 19.98B Vs. Loss of 14B Rupees YoY
- Aurobindo Pharma- US sales lower than estimates at USD 363 mn, revenue down 3% YoY
- Wockhardt Q4 loss widens to Rs 270 cr, India revenue up 48%, UK revenue down 21% YoY
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