Introduction

I told you so ! Corona who? Nifty Breaks out along with SBIN

Author
By Rahul Ghose

Published on 27 Aug, 2020

We have been constantly barking that Nifty is on a upward trajectory for many a blogs now. Nifty has actually scaled passed every single wall of worry with every single naysayer expecting Nifty to correct from every resistance level. They first said so at 10000, then at 11000 and the last one at 11500.

The irony of the situation is that, Nifty was actually unable to cross the 11350 threshold. Every time it would go to the belt of 11300 to 11350, It would retrace back from there. Do you guys know what triggered Nifty’s breakout above this congestion zone ? Its Hilarious…

It was the RBI Governor ! His coming on record and saying that Markets are overvalued and are moving up simple based on liquidity : ) IRONIC ! This news came over the weekend and many people were worried that markets were going to have a negative reaction to his statement ! However, the only real piece of news that could cause some negative reactions to our markets actually caused the markets to keep rallying day after day from last Monday(post his statement). It actually acted as a catalyst for markets to breakout on the upside and cross this congestion zone beyond 11350.

Furthermore, This has become a trend of sorts it seems. Every major company in the last 2 weeks that have come out with negative results have shot up beyond measure. That’s not all, A major stake holder sells shares worth Rs 850 crore in Hdfc bank, This causes the shares to break out from its old resistance point in just 7 days from this news. Euphoria is at its highest ! Corona who ?

Anyways that how markets work ! Apart from Nifty, SBIN has also broken out further. As we have been mentioning in almost all our posts that we continue to be bullish on this stock upto 240 levels. We had picked this up at 155 if you’ll remember.

Now, Coming to being stock specific, We still hold Maruti and are adding another name – Indian hotels into our basket of stocks. I also am expecting a wild move in Tata motors and have thus undertaken a long strangle in it for the October series. Would look for corresponding offset units in September for the same. I also expect Banknifty to start outperforming soon. This would be a major turn around as Banknifty has been the single biggest laggard for our markets in the last 5 months. I’m also looking at selling some far far OTM calls in Bharati Airtel once the stock crosses 535.

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