Weekly Share Market Recap and Technical Outlook - 22nd June 2024

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Introduction

Staying informed about the latest share market trends and technical outlooks is vital for investors and traders. This blog provides an in-depth analysis of last week's market movements and a detailed technical outlook for the coming weeks. We'll focus on key indices, sectors, and stocks that have shown significant movements, supported by detailed data, tables, and insights from Bajaj Broking's Rese latest reports.

Weekly Market Recap

NIFTY50 and Sensex Performance

NIFTY50 (23,501)

The NIFTY50, a benchmark for the Indian stock market, extended its consolidation with a positive bias for the second consecutive week. Trading within a 270-point range, the index closed at 23,501, marking a modest gain of 0.15%.

Sensex (52,501)

Similarly, the Sensex, traded within a narrow range but managed to close the week at 52,501, up by 0.28%.

Performance Table:

Index

Close

Weekly Change

Monthly Change

NIFTY50

23,501

0.15%

2.32%

Sensex

52,501

0.28%

2.38%

Nifty Midcap

19,101

0.37%

5.74%

Nifty Smallcap

9,501

1.06%

7.82%

Bank Nifty

51,661

3.32%

5.93%

Weekly Candle and Stochastic Analysis

The NIFTY50 formed a high wave candle with a higher high and higher low, signaling consolidation at an all-time high for the second week in a row. The weekly stochastic approached overbought territory with a reading of 96, suggesting potential profit booking at higher levels in the near term.

Broader Market Performance

The broader market also performed in tandem with the benchmark indices. The Nifty Midcap and Nifty Smallcap closed the week higher by 0.37% and 1.06%, respectively. This indicates a healthy participation across market segments.

Bank Nifty

Bank Nifty (51,661)

The Bank Nifty outperformed, registering a fresh all-time high of 51,957 before closing the week at 51,661, marking an impressive increase of 3.32%. The index benefited from strong institutional flows and renewed interest from FIIs (Foreign Institutional Investors).

Global Market Overview

US Market

The S&P 500 and the Nasdaq Composite hit record highs last week. However, profit booking at higher levels saw these indices give up some of their gains. The Dow Jones and S&P 500 ended the week positively, up by 1.45% and 0.61%, respectively. The market recorded modest gains during a shortened trading week, with value stocks outperforming growth shares.

Economic Data Highlights

S&P Global announced that its composite index of business activity rose to 54.6 in June, the best level in over two years.

US retail sales barely rose in May, and data for the prior month was significantly revised lower, indicating lackluster economic activity in the second quarter.

Global Market Performance:

Index

Weekly Change

Monthly Change

Dow Jones

1.45%

0.22%

Nasdaq Composite

0.03%

5.72%

S&P 500

0.61%

3.74%

DAX

1.02%

-2.71%

FTSE 100

1.12%

-1.22%

Nikkei 225

-0.50%

-1.23%

Shanghai Composite

-1.14%

-3.79%

Key Domestic Events:

The 53rd GST Council meeting will be held on June 22, 2024, in New Delhi.

India's foreign exchange reserves for the week ending June 21 will be released on June 28, 2024.

Key Global Events:

US New home sales for the month of May will be released on June 26

US Initial Jobless Claims for the week ended June 22 will be released on June 27, 2024

These events are expected to influence market movements in the coming week.

Weekly Technical Analysis and Technical Outlook – 24th to 28th June

NIFTY50 Technical Analysis

Consolidation Range and Key Support Levels

The NIFTY50 is expected to consolidate within the range of 23,800 to 23,300. A breach below 23,300 could open further downside towards the key support area of 22,800. Despite an 11% rally from the June low, a temporary breather cannot be ruled out. This breather should be viewed as an opportunity for incremental buying, with strong support at 23,000-22,800 levels.

Weekly Stochastic and EMA Indicators

The weekly stochastic in the overbought territory suggests potential profit booking. The 10-week EMA (Exponential Moving Average) and the 38.2% Fibonacci retracement of the recent swing (21,281-23,664) at 22,800 provide robust support. This confluence of technical indicators reinforces the significance of the 22,800 level as a critical support zone.

Level

Support/Resistance

23,800

Resistance

23,300

Support

23,000

Key Support

22,800

Major Support

Bank Nifty Technical Analysis

Recent Performance and Outlook

The Bank Nifty moved out of the 49,500-50,800 range, registering a new high of 51,957. The index closed the week at 51,661, up by 3.32%, driven by strong institutional flows and renewed interest from FIIs.

Key Support and Resistance Levels

If the index sustains above the 51,000-51,200-support range, the momentum is expected to continue toward the 53,000 level. For trend-following traders, the 51,000 level is crucial. Any move below 51,000 may trigger selling, opening downside potential to 50,200-50,400 levels. Indicators like ADX (Average Directional Index) and MACD (Moving Average Convergence Divergence) suggest a strong trending move with no visible weakness, and RSI (Relative Strength Index) at 69 indicates bullish dominance.

Level

Support/Resistance

53,000

Resistance

51,200

Support

51,000

Key Support

50,200

Major Support

Sectoral Performance

Outperforming Sectors

Nifty Realty: Key stocks include Prestige and Suntech.

Nifty Pvt Bank: Notable stocks are ICICI Bank and HDFC Bank.

Underperforming Sectors

Nifty FMCG: Marico and ITC have shown strong performance.

Nifty IT: TCS remains a standout performer.

Sectoral Indices: Sectors to Watch Out For

Railway Sector

The railway sector is poised for significant advancements and offers promising opportunities for investors in the stock market. Here are the key developments and trends to watch in the coming weeks:

Technological Advancements

Indian Railways is making substantial progress in signaling and telecommunication technology.

Automatic Signalling Upgrade: 15,000 km of railway lines are being upgraded to automatic signalling, enhancing operational efficiency and safety.

KAVACH Implementation: 37,000 km will be equipped with 'KAVACH', an Indigenous Train Collision Avoidance System, which will significantly reduce the risk of accidents and improve safety standards.

Foreign Direct Investment (FDI)

100% FDI Approval: The government has permitted 100% Foreign Direct Investment (FDI) in the railway sector. This move is expected to attract significant international capital and expertise, fostering modernization and growth.

National Rail Plan (NRP) for India - 2030

NRP Development: Indian Railways has developed the National Rail Plan (NRP) for India - 2030, aimed at creating a modern, efficient, and reliable railway system. This plan is a comprehensive blueprint for the future, focusing on enhancing capacity, improving infrastructure, and integrating advanced technologies.

Budget and Infrastructure Expansion

Budget Allocation: This year, Indian Railways is set to add 50,000 crore INR worth of new lines. These funds will be used to enhance rail safety and expand the Vande Bharat service to more regions.

Increased Budget Allocation: The Central Government, which has consistently increased the budget for new tracks over the years, might raise the allocation by 39% from the February interim budget figures. This significant increase highlights the government's commitment to expanding and modernizing the railway infrastructure.

Stocks to Buy:

Given these developments, certain railway stocks are particularly promising:

IRFC (Indian Railway Finance Corporation)

IRCON (Indian Railway Construction Limited)

RVNL (Rail Vikas Nigam Limited)

IRCTC (Indian Railway Catering and Tourism Corporation)

Railtel

Jupiter Wagon

Investors should keep an eye on these stocks, as the advancements and increased investments in the railway sector are likely to drive their performance positively. The combination of technological upgrades, substantial government support, and favorable FDI policies makes the railway sector a key area for potential growth in the stock market today.

Stock-Specific Analysis

Gujarat Pipavav Port (GPPL)

Recommendation: Buy in the range of 202-206

Target: 227

Stoploss: 191

The stock shows a strong technical setup with a target of 227, suggesting potential upside based on current price levels.

Global Market Insights

US Market: The S&P 500 and Nasdaq Composite reached record highs, indicating bullish sentiment, but profit booking at higher levels shows investor caution. Despite mixed economic data, the Dow Jones and S&P 500 displayed resilience.

European Market: The STOXX Europe 600 Index rose by 0.79%, with major stock indexes in Germany, France, Italy, and the UK showing positive gains due to improved sentiment and easing political uncertainty.

Asian Market: Japanese stock markets declined, with the Nikkei 225 and TOPIX falling due to uncertainties about the Bank of Japan's monetary policy. Chinese stocks also fell, with the Shanghai Composite Index down by 1.14% on mixed economic data.

Conclusion

The past week's market movements indicate a phase of consolidation with a positive bias. The technical outlook suggests that while profit booking at higher levels cannot be ruled out, the overall sentiment remains bullish with key support levels providing strong buying opportunities. Investors should keep an eye on global economic data and domestic events that could influence market dynamics in the coming weeks. By staying informed and leveraging technical analysis, traders and investors can navigate the market effectively, capitalizing on both short-term opportunities and long-term trends.

In summary, the market's resilience amidst mixed economic data and geopolitical uncertainties highlights the importance of a well-rounded investment strategy that incorporates both fundamental and technical analysis. As always, staying updated with the latest market insights and adapting to changing market conditions will be key to achieving investment success.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

For All Disclaimers Click Here: https://bit.ly/3Tcsfuc

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