Weekend Investing Daily Byte – 4 April 2024

3 min read

Market Outlook

On April 4th, Nifty showcased a dramatic scene, illustrated well by the five-minute chart to appreciate the day’s volatility. From the previous close at 22,440, Nifty opened at 22,620, marking a gap up, but within the first half-hour, it reversed, closing the gap and further dropping to 22,300, erasing 300 points by 11:00 a.m. The recovery was notable as most losses were recouped, ending in the green at 22,540, a new high, highlighting an extraordinary roller-coaster expiration day.

Nifty Heatmap

The day’s highlight was HDFC Bank, surging 3%, making it the standout performer. In contrast, State Bank of India and Reliance saw declines, as did FMCG giants like ITC. Some gains were seen in Maruti, Wipro, TCS, Kotak Bank, and Asian Paints, while Adani stocks declined. In the Nifty Next 50, Adani Power continued its impressive rally, Dmart surged by 4%, and Zomato jumped 4.88%. Meanwhile, DLF and Colgate Palmolive faced notable declines among others.

Sectoral Overview

Sector-wise, private banking and IT saw appreciable gains, signaling a potential shift towards these previously lagging sectors. In contrast, PSU banks and public sector enterprise stocks faced downturns, indicating a market rotation.

Mid & Small Cap Performance

Mid-caps reached new highs before succumbing to the initial gap, suggesting a period of consolidation might be underway. Small caps demonstrated resilience, moving closer to their all-time highs and reflecting the market’s robust health.

Nifty Bank Overview

The Nifty Bank index is showing promise of breaking out from a long consolidation, hinting at potential leadership in the market’s next phase.

Nifty Next 50

Nifty next 50 took a rest day today. Opened higher, but closed lower than even yesterday’s close. So there is some sense of cool off that is happening in Nifty next 50.

Nifty Oil & Gas

Oil and gas, surprisingly, was down today. Oil has been going up, but we are also impacted by the windfall tax that the government keeps putting as per their own, you know, formula. So anytime oil starts to go up, you know, the companies are hit Reliance ONGC, they are hit with some windfall tax that you can’t make too much money out of this. So that’s where we lost some ground on the oil and gas segment.

Nifty Private Bank Index

Private banking, you can see, is a very perfect inverse head and shoulders pattern and it is at the neckline, above the neckline there are some gaps also. So it can move very fast from 24,000 towards 25,000 if HDFC bank kind of leads the private banking space here. So overall, quite a good rotation.

Nifty IT Index

Despite the gains in specific sectors, the IT index remains under pressure, urging caution among investors.

HDFC Bank

HDFC Bank emerged as a beacon of strength, surging by 3% and primarily carrying the day’s positive momentum. Last three, four sessions it has been brewing up and today it opened with a gap up. So about 1480 is now support for HDFC bank. It is a buy on dips. So when and the potential is that we may already almost covered this gap and may go and cover this gap as well if this rally has to continue.

The market’s dynamics suggest a rotation where lagging sectors are now taking the lead, indicating comprehensive market strength. Investors are advised not to attempt timing the market but to remain committed to their investment plans, focusing on gradual investment and diversification to navigate uncertainties and capitalize on growth opportunities.

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    Weekend Investing Daily Byte – 4 April 2024