EquiChain Wealth

Defense companies after profit booking seen post budget - we see trading opportunity with result view HAL @ 4897 BDL @ 1426 BEL @ 307.40 Defense budget has been kept higher and indigestion continues to remain long term story Short term - Valuation remain concern but we don't see major sell-off & any positive surprise from quarterly earnings could help. Fresh view on defense stocks - Accumulate with quarterly result view Disclaimer: https://equichainwealth.com/wp-content/uploads/2024/01/Disclosure-on-Advice-Equihain-Wealth-Advisors.pdf

Nifty @ 24522 & Banknifty @ 50783 & VIX @ 12.28 We see market as range bound and find opportunity to sell on rise................no fresh buying yet. Disclaimer: https://equichainwealth.com/wp-content/uploads/2024/01/Disclosure-on-Advice-Equihain-Wealth-Advisors.pdf

Trade setup for 25-Jul-24 1) AXISBANK Q1FY25 result - Below estimate 2) LT result could also disappoint market 3) NASDAQ & S&P500 - down 3.64% & 2.31% respectively on disappointing earnings. GIFT Nifty indicates cut of more than 250 points as market starting July expiry day on weak note. We would still wait for fresh buying as trend remains weak for near term post budget. July series expiry could limit downside today - any rise can be used to reduce exposure level around 75% Disclaimer: https://equichainwealth.com/wp-content/uploads/2024/01/Disclosure-on-Advice-Equihain-Wealth-Advisors.pdf

Nifty @ 24571 & Banknifty @ 52336 & VIX @ 15.20 Strategy till budget - Use rally to book profit and reduce exposure partially. We would prefer to keep investment level around 75% - 90%. View going into budget Banking - Bullish Infrastructure - Bullish on real estate & Cement stocks IT - bullish with positive result & Global factor PSU 's - Defense - Book part profit at higher level & no fresh buy Rail & Infra - Book part profit at higher level & no fresh buy Key positive trigger - 1) Fiscal deficit numbers 2) Capex 3) Benefit for middle class - Increase tax exemption limit & boost for real estate spending Portfolio strategy - Investment around 75% - 90%. Disclaimer: https://equichainwealth.com/wp-content/uploads/2024/01/Disclosure-on-Advice-Equihain-Wealth-Advisors.pdf

Last week – review Indices tested upper end of the range this week, Nifty @ 21854 & Banknifty @ 52782. Indices closed flat this week and VIX is now around 15 level and likely to increase further to 16 level due on Budget on 23-Jul-24. IT stocks was in focus this week as TCS result last week, HCLTECH & INFY result triggered to fresh 52-week high & PSU ‘s stocks witness some profit booking. Technical Insight Nifty RSI @ 65.45 & RSI average @ 71.53. Nifty RSI is indicating downward trend but this trend is very early to expect major correction. Nifty @ 24279 & 23924 could be tested on lower side while 24854 to act as resistance level. Banknifty RSI @ 55.90 & RSI average @ 59.36. Banknifty immediate support comes at 50813 & 49350 and resistance level at 53180. Banknifty major weakness only after 50813 is broken. Technical trend indicates sideways to downward move. Nifty above 24854 & Banknifty above 53180 could be seen as fresh positive break-out and trigger fresh rally. Our approach would be remaining side ways with negative view with fresh upside only after the key levels are crossed. Fundamental Insight 1) India May Cut Budget Deficit Target Slightly After Revenue Boost 2) India's Forex Reserves Soar by Nearly $10 Billion To Hit New Record 3) RBI Governor Sounds Caution on Low Bank Deposit Growth Equichain Wealth Advisors: Market View & Strategy Market will be reacting to muted RELIANCE result declared on Friday, 19-Jul-24. HDFCBANK & KOTAKBANK result to be declared on Saturday 20-Jul-24. Economic survey on 22-Jul-24 & Union budget on 23-Jul-24 will be key event this week followed by F&O expiry on 25-Jul-24. We believe, fresh view can be taken in after next week is completed as next week will be full of event and market will be reacting to event & F&O expiry will add volatility. We would prefer to keep exposure around 75% on lower side, which is currently around 90%. We would not add fresh net long position but find re-shuffling opportunity within exposure range of 75% - 90% and prefer to have stock specific approach. Click on the attachment to read the full report posted above 👆👆 Disclaimer: https://equichainwealth.com/wp-content/uploads/2024/01/Disclosure-on-Advice-Equihain-Wealth-Advisors.pdf

Global Market – ECB meeting this week and BOJ & U.S. Fed meeting in month-end This week we will discuss how central banks will continue to drive sentiment as ongoing earnings season will remain in focus with stock specific move while sentiment on risk-on / risk-off will be driven by global central banks. ECB Interest Rates Held as Weaker Inflation Raises Prospect of Cuts The European Central Bank left interest rates unchanged for a fourth meeting as a softer outlook for inflation and economic growth bolstered expectations for cuts starting in June. The Governing Council reiterated that maintaining this level of borrowing costs for “sufficiently long” will make a “substantial contribution” to returning consumer-price growth to the 2% goal. U.S. Fed & BOJ in focus as Rate Decisions due by month end Investors may glean more on the Federal Reserve’s resolve to ease and how close Japan is to finally exiting negative interest rates as central banks set policy for almost half the global economy. BlackRock, Man Group Reveal Big Japan Bets Before BOJ Decision Speculation that the Bank of Japan will raise interest rates on Tuesday intensified after the nation’s largest union group announced stronger-than-expected annual wage deals. The stakes will be enormous, changing market dynamics at a time when the nation’s blue-chip share gauge is towering near its record high, bond yields are creeping back up and the weak currency is boosting exporters. Equichain Wealth Advisors: Market View & Opinion We would like to highlight on fact that market is betting that U.S. Fed and ECB are expected to cut interest rate in their September meeting while BOJ is expected to raise interest rate and exit near zero interest rate policy, currently 0.10% as inflation rises. Interest rate by major global central banks is in contrarian direction can increase volatility in coming weeks. ECB & U.S Fed are expected to cut rate in their September 2024 meeting and there are set of economic data which are due to be released before their meeting which could impact their decision. Click on the attachment to read the full report posted above 👆👆 Disclaimer: https://equichainwealth.com/wp-content/uploads/2024/01/Disclosure-on-Advice-Equihain-Wealth-Advisors.pdf

IT stocks - Good level to book some profit We were in accumulation zone - post dated 2-Jul-24 🚀🚀

Equichain Valuation Matrix – Budget view Today we will be discussing Banking, Metal, Defense & IT stocks as indices continue to trade at fresh life-time high. Going into budget and earnings season, optimism around budget is high while there is valuation concern in selection sector. Key points for banking sector • RBI declared dividend above estimate, giving space to manage fiscal deficit under check & while continue to spend on capex. • Credit growth remains stable and asset quality remains stable and good. HDFCBANK & KOTAKBANK result on 20-Jul-24 & Union finance budget on 22-Jul-24 are key events for banking stocks. Key points for IT Sector • TCS & HCLTECH quarter result were in-line with estimate with slight beat on positive side. • Management commentary for TCS & HCLTECH was positive as they guide FY25 to be better than FY24 • INFY result on 18-Jul-24 will provide further cues for IT stocks Key points for Defense sector • Most defense PSU ‘s has rallied post 5-Jul-24 on political stability and cabinet formation and government focus on indigestion of defense acquisition. • Valuation on defense companies may look stretched but budget will provide further clarity on defense companies. Equichain Valuation matrix: Approach on these sectors with Budget view With a view on union finance budget on 22-Jul-24, we would be focusing on fiscal deficit numbers, capital expenditure on infrastructure spending. We would also be focusing on railway, shipping & road infrastructure project and capex figures. We maintain positive view with medium to long term on market, however market will be volatile during budget and reaction to budget for next 1 – 4 days after budget. Our strategy will to book profit at higher level in select stocks and sector which has seen huge run-up in last one year and we maintain accumulation for Banking and IT stocks. Click on the attachment to read the full report posted above 👆👆 Disclaimer: https://equichainwealth.com/wp-content/uploads/2024/01/Disclosure-on-Advice-Equihain-Wealth-Advisors.pdf

U.S. Fed signaling rate cut in September 2024 FOMC meeting? Most likely.............as Fed fund rate shows 87.1% probability.

Powell Says If You Wait Until Inflation Gets All The Way Down To 2%, You’ve Probably Waited Too Long Read more at: https://www.ndtvprofit.com/global-economics/powell-says-recent-data-raise-confidence-inflation-on-path-to-2?src=p1 Copyright © NDTV Profit

Last week – review Indices had a flat session this week as Banknifty closed on back of weak HDFCBANK ‘s performance. IT stocks rallied on back of TCS earnings which was declared on Thursday after market hours. HCLTECH declared its quarterly result on Friday after market hours. OIL & SCI were in focus ahead of Budget on 22-Jul-24 on news of ship building JV between state run refiners and SCI. Technical Insight Nifty RSI @ 72.53 & RSI average @ 70.65 indicates over-bought zone but market momentum remains very strong. Nifty trend line support comes around 24124 and resistance level 24741. Banknifty RSI @ 57.85 & RSI average @ 60.74. Banknifty has underperformed this week and although Banknifty remain positive, but weak when compared to Nifty. Banknifty immediate support level comes at 51718 & resistance level comes at 53180. Indices are expected to trade in positive trend will near term support on Nifty comes at 24185 & Banknifty @ 51718 while near term resistance on Nifty comes at 24741 & resistance on Banknifty comes at 53180. Fundamental Insight 1) RBI Governor Das Says It’s Too Early For Rate Cuts 2) TCS Q1 Results: Margin Contracts, But Long-Term Forecast Maintained Equichain Wealth Advisors: Market View & Strategy We have maintained our bullish view on Banks and IT stocks in past few weeks. IT stocks has been reacting positively post TCS result and INFY result due on 18-Jul-24 will be provide further cues. HDFCBANK is due to announce its quarterly result next Saturday and we see this as important event as it will complete one year of merged with HDFC LTD. HDFCBANK ‘s NIM and growth momentum will key to watch-out from earnings. We continue to remain bullish on IT & Banks and PSU will provide short term trading opportunity. We would gradually look for opportunity to deploy fund up to 90% - 95% as we remain bullish with medium to long term view. Click on the attachment to read the full report posted above 👆👆 Disclaimer: https://equichainwealth.com/wp-content/uploads/2024/01/Disclosure-on-Advice-Equihain-Wealth-Advisors.pdf

Global Market – U.S. Fed rate cut in September 2024 & Fed chair Powell ‘s testimony This week we will discuss U.S. economic data; U.S. Fed chair Jerome Powell testimony and quarterly earnings released this week. U.S. indices are trading near its high on optimism of rate cut and interest rate cut. U.S. CPI & Core CPI data • U.S. CPI data – actual @ 3.0% Vs estimate 3.1% & previous 3.3%. • U.S. Core CPI data – actual @ 3.3% VS estimate 3.4% & previous 3.4%. U.S. headline inflation data came below market estimate giving hope for rate cut in September 2024 FOMC meeting. In last FOMC meeting press conference Fed chair Jerome Powell indicated 1-rate cut for 2024 & 3-rate cut in 2025. U.S. Fed chair Jerome Powell testimony on 9th & 10th July 2024 The next FOMC meeting takes place on July 30-July 31 while the US CPI data for June arrives on July 11. FOMC has maintained the target range for the federal funds rate at 5-1/4 to 5-1/2 percent since last July. The first-rate cut by FOMC is expected to be in September. Fed fund rate monitor – indicates 90.3% probability of September rate cut. As CPI & Core CPI inflation data which came below estimate and fed chair Powell testimony raised the hope of first rate cut of this cycle could be as soon as September 2024 FOMC meeting. Market is now expecting rate cut in September 2024 FOMC meeting with 90.3% probability. Equichain Wealth Advisors: Market View & Opinion Global market and key indicator are now factoring in rate cut in September 2024 FOMC meeting, next FOMC meeting is scheduled on 30 – 31 July 2024 and market is expecting rate to remain unchanged in upcoming FOMC meeting. If earnings meet estimate or better the estimate, it will provide another boost to market which are currently trading near its recent high. DOW30 index is back at 40000 level mark while S&P500 & NASDAQ are much higher than March 2024 level on AI stock / technology stocks. Click on the attachment to read the full report posted above 👆👆 Disclaimer: https://equichainwealth.com/wp-content/uploads/2024/01/Disclosure-on-Advice-Equihain-Wealth-Advisors.pdf

IT stocks leading the rally after TCS result We see IT stocks in accumulation zone with medium term view with two key potential positive triggers. 1) Quarterly result - INFY result on 18-Jul-24 could provide further positive momentum 2) Rate cut in U.S. after soft CPI & Core CPI data released on 11-Jul-24. IT stocks has underperformed in last 8 - 10 quarters - Since January 2022 Positional / Investment view Disclaimer: https://equichainwealth.com/wp-content/uploads/2024/01/Disclosure-on-Advice-Equihain-Wealth-Advisors.pdf

Nifty @ 24257 & Banknifty @ 51801 & VIX @ 14.23 TCS Result due today U.S. CPI & Core CPI data due today. We see this correction as healthy and further downside could be used as buying opportunity. Nifty @ 23999 & Banknifty @50813 - to act as important support level. Disclaimer: https://equichainwealth.com/wp-content/uploads/2024/01/Disclosure-on-Advice-Equihain-Wealth-Advisors.pdf

Nifty @ 24284 & Banknifty @ 42460 & VIX @ 13.48 Fresh buying can be preferred on correction and we would avoid chasing market. Defense stocks continue to remain focus with view on Budget and spending. But we would prefer to focus on IT & Banks - earnings. Disclaimer: https://equichainwealth.com/wp-content/uploads/2024/01/Disclosure-on-Advice-Equihain-Wealth-Advisors.pdf