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PSU Banks Can take off from here. Signs looking ominous. Trend line has given support to PSU bank index. Father line has given support to PSU bank index. If mother line gives support later this week. They can have a huge upside in the range of 10 to 40% depending on individual banks and their fundamentals.Things are looking ominous. Mother Line Breakout (Mother's Blessing/Ashirwaad can happen later this week.) To know more about Mother, father and small child theory and Happy Candles numbers that we assign to stocks, Parallel channel etc. read my book The Happy Candles way to wealth creation. The book is available on Amazon in paperback and Kindle version. RSI is crossing over to the bullish territory. Moving Averages are converging in a positive way. Keep all the banks in this index on radar. Performance of each can differ depending on fundamentals of each one. The PSU Bank Index comprises of banks like SBI, BOB, Indian Overseas Bank, Punjab National Bank, Bank of Maharashtra, UCO Bank, Central Bank of India, Union Bank of India, Punjab & Sind Bank, Bank of India, Canara Bank and Indian Bank. Keep them all in radar.
NSE:CNXPSUBANKLong
by Happy_Candles_Investment
Index to watchout for next week: Pharma Index. For the past few weeks we have been trying to understand how to use the performance of an index reflects in performance of stocks that are constituents of that particular index and vice versa. By catching the index that is on the verge of breaking out or has broken out during the week, we can plan our investment and trades around it to maximize our returns. We spoke about Bank Nifty, then IT Index. Both gave considerable returns in the last 2 /3 weeks. The index that look most interesting this week end is Pharma Index. Pharma index has given a powerful breakout and has closed above very important fibonacci resistance (20380) this week. The closing of Pharma index this week was 20453.85. The next 2 Fibonacci resistances for Nifty will be at 21013 and 21475. Supports for the Pharma index remain at 19936 and 19397. 19397 is a mega support which has a combined power of Fibonacci, Mid-channel and 50 days EMA. The stocks that constitute the Pharma index are: Lupin, Dr.Reddy's Lab, Torrent Pharma, Alkem Lab, Biocon, Divi's Lab, Sun Pharma, Cipla, Zydus Life and Aurobindo Pharma. Some Peripheral Pharma stocks can also be looked at for investment purpose. We are not giving a buy or sell call on any of these companies. This is just an educational article explaining the potential moves of Pharma Index, how it can move in either direction and what can be the technical reasons behind the same. Disclaimer: There is a chance of biases including confirmation bias, information bias, halo effect and anchoring bias in this write-up. Investment in stocks, derivatives and mutual funds is subject to market risks, please consult your investment advisor before taking financial decisions. The data, chart and other information provided above is for the purpose of analysis and is purely educational in nature. The names of the stocks or index levels mentioned in the article are for the purpose of education and analysis only. Purpose of this article is educational. Please do not consider this as a recommendation of any sorts.
NSE:CNXPHARMALong
by Happy_Candles_Investment
formation of cup and handle in progress for IT Index.A likely Cup and Handle Structure is forming in IT Index on Weekly charts. It has been underperforming since last 24 months or so. It had reached 39446 levels in January 22. Since then the peak remains unscaled. There were multiple reasons for this. Let us analyze the reasons which resulted in decline of IT Index and let us see how the future looks for it. Reasons for Decline: 1) Rate hike cycle initiated by US Federal Reserves to control inflation. Rate hike cycle was one of the main reasons for underperformance of It index. Rate hike meant decrease in spending and decrease in spending resulted in limited growth of this index. 2) Margin Pressure due to increase in spending. Most of IT companies and their employees enjoyed work from home during COVID. Work from home, worked in favour of many of these companies as there was decreased spending. Now in the post COVID era lot of companies had to/have to incentivise employees to come back to office. Regular spending on electricity, conveyance, office miscellaneous expense again came back to pre COVID levels. This has put pressure on margins. 3) Threat of AI is still looming large on It companies. Still it is to be seen if AI can replace a lot of work many of these companies used to do or not. The scale of effect is yet to be determined in toto but it looks like it will certainly have an effect. Indian IT companies are well known to adapt to the changing circumstances but it is yet to be seen and determined what future hold for IT companies. There was an article doing rounds if IT companies will have a similar fate to the cotton mills of past. The statement looks exaggerated but the days of unlimited growth seem to be over. Investors in service sector have to be rational with their expectations in future. 4) Rising sentiment of Nationalism across the globe. Rising sentiment of nationalism and be local buy local employ locals can also effect a lot of these companies. Hiring locals rather than shipping employees from India on H1B visa will definitely effect profit margins. Reasons why IT Index might rise and shine. 1) US Fed has commented that we are looking forward to at least 1 rate cut in this year. The logic is that if you fall due to rate hike you rise due to rate cut. Market is forward looking and the reason of bottom formation and recent or future rise can be credit to forward looking nature of market which will take into account rate cut or will take into account the same. 2) There are green shoots visible which indicate fresh lease of life to the stagnant or underperforming index. 3) Indian It companies are known for their resilience, deep pocket and adaptability. They are capable of making subtle or large scale changes to their work culture, work ethics and work to incorporate AI and use AI to their favour. (Whether it actually happens is yet to be seen.) 4) On charts if the recent low of 31467 is not broken and future resistances of 35201 and 35962 are taken down we can see an up move towards the targets of 36952, 38530 or even the previous high of 39446. If 39446 is conquered in future within this year with a weekly candle. We can see further upside. Stocks that constitute IT Index are TCS, Infosys, HCL Tech, Wipro, Tech Mahindra, LTIM, LTTS, Mphasis and Coforge. In addition to this selective Mid and Small Cap IT companies can also follow the suit of the big players. In the space of Mid and Small Cap IT companies there are players like OFSS, Coforge, Birla Soft, Affle, Mastek, Happiest minds, FSL, Map My India, Eclerx, Tanla Platforms etc. We are not giving a buy or sell call on any of these companies. This is just an educational article explaining the potential moves of It Index, How it can move in either direction and what can be the reasons behind it. Disclaimer: There is a chance of biases including confirmation bias, information bias, halo effect and anchoring bias in this write-up. Investment in stocks, derivatives and mutual funds is subject to market risks, please consult your investment advisor before taking financial decisions. The data, chart and other information provided above is for the purpose of analysis and is purely educational in nature. The names of the stocks or index levels of spot Nifty mentioned in the article are for the purpose of education and analysis only. Purpose of this article is educational. Please do not consider this as a recommendation of any sorts.
NSE:CNXITLong
by Happy_Candles_Investment