Money Doesn’t Come Without Guidence ...
Tipping point! Crude realities set it
We are fast approaching the tipping point that characterizes all unsustainable economic developments - George Soros
The market is all set to witness a wobbly Wednesday as equity markets are running out of energy. Crude prices hit a seven-month low and technically speaking crude has moved into bear territory. The ongoing weakness in crude and other commodities raises doubts on the Fed’s view that weak inflation rates are transitory and not a trend. George Soros says Brexit is a lose-lose proposition, harmful both to Britain and the EU. A weak start is in the offing for the Indian market. MSCI added China’s domestic stocks to its emerging-markets index and this could dampen sentiment for India. Reports indicate PE funds may be exempted from one-year lock-in requirement in IPOs as SEBI board meets today.
TECHNICAL INSIGHTS: Private Banks show the way
Nifty movement, post the peak of 9,709 (on June 6), has made life miserable for index traders. Declining gradually, it touched a low of 9,561. Having said that, sectoral pockets of strength invariably abound in every dreary phase, providing money-making opportunities in a dull market. BankNifty, especially the strength in PrivateBank Index bears testimony. A comparative analysis of PrivateBank and PSUBank indices shows strong divergence. On 16th May 2017, PSUBank made a peak of 3,846 and thereafter, it underwent a swift decline of ~11%. In the same period, private bank index rallied by ~5%. We believe ongoing outperformance of Private banking stocks over PSU Banks to continue.
We recommend to Buy Federal Bank, as the recent price structure shows breakout at all-time higher zone; while ongoing correction in PNB is likely to continue, hence shorting July fut. is advisable. For levels kindly refer note.