Pre Market Report 25-Feb-2025

Key Concepts:

• FIA (Foreign Institutional Investors) selling pressure
• Gift Nifty discrepancy
• Brokerage upgrades (City group) and their reliability
• Technical analysis: Support and resistance levels (22800, 23300, 23150, 23800, 22500)
• Fibonacci retracement
• Government intervention
• Index heavyweights (HDFC Bank, IT stocks)
• Market correction and potential bottom

1. Market Overview and FIA Activity:

• US markets experienced a downturn, with S&P 500 and NASDAQ falling, while Dow showed slight positive movement but with high volatility.
• Asian markets are predominantly down.
• FIA selling reached 6,200 crores yesterday, marking one of the highest selling figures in February.
• Gift Nifty initially showed a nearly 100-point surge, which was later sold into, trading lower than the previous day's close in India.

2. Brokerage Upgrades and Skepticism:

• City group upgraded India, setting a Nifty target of 26,000 for the year.
• The speaker expresses skepticism towards foreign brokerage statements, suggesting potential ulterior motives such as facilitating client exits.
• He extends this skepticism to local brokerages as well.

3. Market Sentiment and Technical Analysis:

• Positive news is being used as an opportunity to sell.
• The speaker suggests that the market needs a technical bounce to avoid a severe fall.
• 22800 acted as a strong support level previously, tested multiple times, but is now a resistance after being decisively broken.
• Open interest data shows significant call writing at 22800, potentially by those managing put option positions.
• Resistance levels identified: 22800, 23150 (50% Fibonacci retracement), and 23800 (100% retracement).
• The probability of market recovery is deemed low without significant government intervention.

4. Government Intervention and FIA Concerns:

• The speaker believes small government actions will not significantly impact the market.
• He speculates about potential behind-the-scenes discussions and demands from FIAs, suggesting dissatisfaction with Indian policies as a reason for selling pressure.
• He cautions against comparing the current market situation to previous market falls and recoveries, as the current fall is not driven by any specific reason but by its own weight.

5. Key Levels and Index Heavyweights:

• Yesterday's low is crucial to watch; breaking it could lead to a more bearish market.
• HDFC Bank managed to close positive in US trading.
• IT stocks, initially resilient, have also started to fall.
• The speaker suggests that the fall in IT stocks could indicate the final leg of the correction.
• 22000 is expected to be a strong support level, even for the next month.
• The expected trading range for today is 22500 to 22800.

6. Fibonacci Retracement Explanation:

• The recent high is 23800 and the recent low is 22500.
• A 50% Fibonacci retracement is calculated to be 23150.
• A 100% retracement would bring the market back to 23800.

7. Conclusion:

The speaker presents a bearish outlook on the Indian market, citing FIA selling pressure, skepticism towards brokerage upgrades, and the need for significant government intervention. He identifies key support and resistance levels based on technical analysis and Fibonacci retracement. While suggesting the market may be nearing the end of its correction, he emphasizes the importance of monitoring key levels and index heavyweights. The overall tone is cautious, advising viewers to be wary of positive news and potential ulterior motives behind market movements.