India Inc Quarterly Earnings and Nifty Corelation

7 окт.

We all know that our beloved NIFTY has shy of 1500 points in short time, falling from a cliff. Naturally people are eager to guess if the holy grail Bottom is there, or it will test the 4th of June Election Result Day low at least.

Being a price action student, it's always good to look at the history and try to take a leaf out from it. Specifically, when I can recall what happened one year back in October 2023 where there were substantial FII selloffs before Q2 results (of FY 23-24). Of course there is a slight difference in the situation. Last year the moonsoon was not that good, this year above normal.


So I took all the last 4 quarterly result and see what happened around these times in Daily timeframe.

As it's evident:

1. In 26/10/23 (Q2 results midway) there were a dip to 18850 level when RSI was at oversold region.
   
2. Within next two months, the Nifty gave ~15% return.
   
3. Again during 24th Jan'24 (Q3 results midway) there is a dip and then Nifty quickly recovered.
   
4. Again during 19/04/24 (Q4/annual results midway), there is a dip and then again smart recovery.
   

The things become even more interesting if we check the RSI beyond this point (last 6 months). Here are the obervations:

1. 19th April'24, 9th May'24, 4th June'24, 5th Aug'24 - the RSI was at 40 level.
   
2. Price were more or less around same/similar level. (Except Aug when Nifty was at 24000).
   
3. Now the Nifty RSI was at 36. But the price is at 24800.
   
4. It's indices Hidden Bullish Divergence

My Expectation:

• There can be a little more dip (lets say another 150-250 points, at max 24550).
  
• Then Nifty starts recovering smartly and will try to reclaim the 25500 Resistance level.
  
• We shall see what will happen next.
  

So essentially end of this week onwards expecting a 800/1000 points recovery, IMO.

Seems too optimistic? May be .. lets see.

Just sharing my personal views. End the day: Market is Supreme and Price Action is the King.