The credit policy scheduled in the middle of the week would provide cues to the outperforming banking sector and the interest rate sensitive sectors. The trend reversal is placed near to 10,500 which has multiple averages and has the highest put OI in June series.
Vikas Jain
Reliance Securities
The markets traded volatile with respect to the derivatives expiry in a range of 10,540-10750 levels, but midcaps and smallcaps continue to see pressure to decline by 6.8% in May 2018.
The quarterly result season has ended without any major upgrades in earnings and higher crude prices continue to keep the markets under pressure. Private banks had a strong up move on back of HDFC Bank outperforming the broader markets.
Auto stocks gained on the last trading day of the week as the monthly sales numbers were better than expectations for Maruti, Bajaj Auto and TVS Motors while Eicher Motors disappointed.
related news
Nifty has gained by 0.9%, while midcap and small caps declined by 1.3% and by 0.8% respectively for the week.
Among sectors it was a mixed bag with Banks, Auto, and Energy to gain by 1.5% average while IT and Pharma declined by 1.5% and 1% respectively. India VIX has gained by 7.3% to close at 13.6 levels and a breakout above 14 would trigger further volatility for the markets.
As mentioned Nifty had traded in range with beaten down sectors like Auto and energy to gain for the week while IT sector declined. We continue to believe Nifty will trade in a range of 10,500-10800 levels over the next few weeks.
The credit policy scheduled in the middle of the week would provide cues to the outperforming banking sector and the interest rate sensitive sectors. The trend reversal is placed near to 10,500 which has multiple averages and has the highest put OI in June series.
CMP: Rs 3626 | RECO: BUY | TARGET: Rs 3820| STOP LOSS: Rs 3500
The stock has ended five weeks old falling trend with the gain of 2.1%, signaling short-term turnaround.
Due to recent positive development in the stock, its key technical indicators have also given bullish cross-over.
As per the current weekly set-up, we believe that the stock will soon resume its northbound journey and will visit prior highs, which are placed at Rs3,820.
On the lower side, the stock will find support around its psychological level-Rs3,500.
Thus long position can be initiated here for the target of Rs3,820 with a stop loss of Rs3,500.
CMP: 1582| RECO: BUY| TARGET: 1760| STOP LOSS: 1480
Higher level profit booking dragged the stock more than 250 points from its life-time-high (Rs1,760), where its 20-week moving averages once again worked as a key reversal point and supported healthy reversal.
The key technical indicators-RSI and MACD are trading above their neutral line from last couple of years signaling overall strength in the stock.
Reversal in Stochastic from its oversold zone is indicating limited downside in the stock (if any).
We believe the stock will keep moving higher and will soon visit its life-time-high.
In case of any decline, its 20-week moving averages will continue to provide strong support to the stock.
Thus long position can be initiated here for the target of Rs1,760 with a stop loss of Rs1,480.
CMP: 1161| RECO: BUY| TARGET: 1300| STOP LOSS: 1075
The stock rose to new life-time-high after a pull back, signaling strong up-trend.
The key technical indicators on the weekly scale are bullish.
As per the current set-up, we believe the stock will continue its northward journey and will keep exploring uncharted territory.
In case of any decline, its 20-week moving average will work as key reversal point for the stock.
On the higher side, the stock will face hurdle at Rs1,300, which coincides with its 100% Fibonacci Extension level of prior up-move (from Rs626 to Rs1,073).
Thus long position can be initiated here for the target of Rs1,300 with a stop loss of Rs 1,075.
Disclaimer: The author is a senior research analyst at Reliance Securities. The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.