Analyst advise investors to continue holding long positions and add fresh positions only after a breakout above 10985 which could open room for the index towards higher levels of 11080-11200 levels.
Despite muted activity across the globe, Indian market managed to stage a smart rebound. oil prices have cooled off from recent highs which should act as a tailwind for India markets.
With the Monetary Policy Committee (MPC) statement to be declared on 7th Feb, rate sensitive stocks will remain in focus. Most experts expect RBI to retain a ‘pause’ on interest rates, but there could be a change in stance to Neutral from ‘calibrated tightening’ as of now.
We did some number crunching as to how market behaved in the month of February in the last 10 years. Bulls and bears battle it out in the month of February which is usually marred with Budget volatility.
Anecdotal evidence suggests that bulls came on top and pushed the Sensex to close in green in 5 out of last 10 years, data from Ace Equity showed.
The S&P BSE Sensex rallied 4.5 percent in the month of February of 2014, followed by a 2.6 percent rally seen in the years 2012, and 2.1 percent gain seen in 2017.
On the other hand, bears were able to take control of D-Street in 5 out of the last 10 years. Maximum carnage in the last 10 years was seen in the year 2016 in the month of February when Sensex plunged by 7 percent followed by 4.8 percent drop in 2018, and 4.6 percent fall seen in the year 2013.
Snapping its two-day losing streak, the rupee ticked higher by 23 paise to close at 71.57 per US Dollar on Tuesday amid fresh foreign fund inflows and gain in Indian markets.
On the institutional front, FPI and DIIs were both net buyers in Indian markets to the tune of Rs 420 crore and Rs 194 crore respectively, provisional data showed.
Big News:
On the earnings front, 132 companies will be declaring their results for the quarter ended December on Wednesday which includes prominent names like Adani Power, Balkrishna Paper Mills, Cipla, Cummins India, Graphite India, JSW Steel, Lupin, Punj Lloyd, Siemens, Venky’s India and Wheels India among others.
Cipla: PAT likely to fall by 13% YoY to Rs 403 crore
Lupin: PAT likely to fall by 4% YoY to Rs 247 crore
Siemens: PAT likely to grow by 11% YoY to Rs 1 crore
(All the estimates are from Motilal Oswal)
Technical View:
Nifty formed a bullish candle for the fourth consecutive day in a row
It closed above 10900 for the second consecutive day which is a good sign for the bulls
However, broader market still reels under pressure
One interesting thing which was visible on the charts was a buy signal triggered by MACD indicator on the daily charts. MACD stands for Moving Average Convergence / Divergence.
The MACD indicator is basically a refinement of the two moving averages system and measures the distance between the two moving average lines.
The indicator gave a sell signal on January 24 and the index recorded an intraday low of 10,583 on 29 January before bouncing back towards 10,900 levels.
Analyst advise investors to continue holding long positions and add fresh positions only after a breakout above 10985 which could open room for the index towards higher levels of 11080-11200 levels.
Three levels: 10886, 10956, 11000
Max Call OI: 11000, 11200
Max Put OI: 10700, 10400
Technical Recommendations:
We spoke to Religare Broking Ltd and here’s what they have to recommend:
Kotak Mahindra Bank: Buy| LTP: Rs 1277| Target: Rs 1360| Stop-Loss: Rs 1220| Return 6.5%
Pidilite Industries: Buy| LTP: Rs 1125| Target: Rs 1190| Stop-Loss: Rs 1085| Return 5.7%
Bajaj Auto: Sell Feb Futures| LTP: Rs 2711| Target: Rs 2540| Stop-Loss: 2750|Downside 6%
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