Mkts may turn volatile as new F&O series begins
As usually trade in mid-&small-cap space that is where lot of action would continue; The strategy would be to see where mkts run into resistance and look for a sharp correction.
image for illustrative purpose
Markets in the June 22-28 period under review saw NSE Nifty hit a new intraday high finally. It was struggling to do so for quite some time and came as close as a whisker, but had failed. Finally on Wednesday it hit a new intraday high in style and did so opening with a gap. Nifty opened at 18,908.15 levels and went on to hit a high of 19,011.25 points before closing at 18,972.10 points. The period under review saw BSE Sensex gained 392.27 points or 0.62 per cent to close at 63,915.42 points, while Nifty gained 115.25 points or 0.61 per cent to close at 18,972.10 points. Markets gained on three of the five trading sessions and lost on two.
Dow Jones lost in the first four sessions of the period under review and gained in the 5th session. Dow lost 127.13 points or 0.37 per cent to close at 33,926.74 points.
In primary market news, the IPO from IdeaForge Limited is open and at the time of writing this article close to the end of the 3rd day, the issue was subscribed 44.81 times with QIB portion subscribed 31.42 times, HNI 59.64 times and Retail 62.53 times. There were 18.26 lakh applications in all. The issue was supposed to close on the June 29, Thursday with Wednesday being a holiday. With the holiday being shifted to Thursday, the issue would remain open on an extended basis for one more day and now close on June 30, Friday. Expect subscription levels to rise further.
The issue from Cyient DLM Limited was subscribed 7.36 times overall, with QIB portion subscribed 0.59 times, HNI subscribed 10.81 times and Retail portion subscribed 24.23 times. There were 7.44 lakh applications in all. The issue would be closing on June 30, Friday as scheduled.
PKH Ventures Limited is tapping the capital markets with its fresh issue of 1.82 crore shares and an offer for sale of 73.73 lakh shares in a price band of Rs140-148. The issue opens on June 30, Friday and closes on July 4, Tuesday. The issue would garner about Rs380 crore at the top end of the price band. The company is into the business of construction and development, hospitality and sale of food products and management services. It reported revenues of Rs199.35 crore for the year ended March 2022 and a PAT of Rs40.5 crore. For the nine months ended December 22, revenues were Rs125.45 crore, while PAT was Rs28.63 crore. The EPS for the year ended March 2022 was 6.33. The PE band is 22.12-23.38 based on March 22 results.
The issue of new highs is finally behind us. June futures expired a day earlier and bulls dominated the way this time around. The series ended with gains of 650.95 points or 3.43 per cent. Very clearly this has been a series where the bulls have had their way virtually all through the series.
The period ahead June 30-July 5 would see markets trying their best on building from new highs which have been made on Wednesday. Results for the April-June quarter are at least another 10 days away and till then there are no impediments in the way of bulls. Having made new highs, there is normally a 3 per cent spill over, which is seen technically and that would mean about 600 points on Nifty and 2,000 points on BSE Sensex. That’s quite a lot and it would take a lot of rallying to achieve. Expect markets to be volatile when the new series begins with movement bordering on the wilder side. Trade in the midcap and Small cap space as that is where the action would continue.
The strategy would be to see where markets run into resistance and then look for a sharp correction as targets in the short run have been achieved. This rise from 18K to 19K on Nifty has been a laborious one and it has taken almost 21 months to achieve the same. It’s time to celebrate for the day, but for how much longer not sure. Trade cautiously.
(The author is the founder of Kejriwal Research and Investment Services, an advisory firm)
