Taking Stock: Indices rally for 2nd day in a row; Nifty50 reclaims 12,200 levels

Indian market rallied for the second day in a row on February 12 which helped Nifty50 reclaim its crucial resistance level of 12,200 to close at a 3-week high. The S&P BSE Sensex rallied over 300 points.

Let’s look at the final tally on D-Street – the S&P BSE Sensex rose 349 points to 41,565 while the Nifty50 closed with gains of 93 points at 12,201.

Sectorally, action was seen in FMCG, Banks, Energy, IT, metals, and Auto index while profit-taking was seen in power, realty, consumer durables, and capital goods indices.

The broader market underperformed as the S&P BSE Midcap index was down 0.29 percent while the S&P BSE Smallcap index fell 0.13 percent.

Going forward, D-Street will react to IIP and CPI numbers on Thursday and any global development towards Coronavirus. The impact of coronavirus has already affected the supply chains and factory activities across the globe.

“Markets will react to the macroeconomic data viz. IIP data and CPI inflation numbers in early trade on Thursday,” Ajit Mishra, VP - Research, Religare Broking Ltd told Moneycontrol.

“Indications are in favour of up move to continue but participation would remain restricted so traders should plan their positions accordingly and prefer private banking, financials, FMCG and IT for fresh buying,” he said.

Top Nifty gainers – ICICI Bank, Nestle India, Kotak Bank, and HUL

Top Nifty losers – SBI, BPCL, Bharti Infratel, and YES Bank

Stocks and sectors:

Sectorally, the S&P BSE FMCG index rose 1.9 percent, followed by the S&P BSE Bankex which was up 0.76 percent, and the S&P BSE IT index gained 0.70 percent.

Profit taking was seen in S&P BSE Power index that fell 0.96 percent, followed by the S&P BSE Realty index that fell 0.81 percent, and the S&P BSE Consumer Durables index was down 0.38 percent.

Volume spike of 100-600% was seen in HDFC, CESC, Dabur India, PFC, HUL and Max Financial Services.

Long Buildup was seen in stocks like PFC, Balkrishna Industries, Max Finance, Kotak Bank

Short Buildup was seen in stocks like Siemens, UBL, Jubilant FoodWorks, and Ashok Leyland

More than 100 stocks on the BSE hit their fresh 52-week high that includes names like Honeywell Auto, GSK Consumer Health, Atul, Pfizer, HUL, Divis Laboratories, PVR, L&T Infotech, and Asian Paints, etc. among others.

Stocks in the news:

Hindustan Unilever: Shares of Hindustan Unilever rallied more than 5 percent to hit a record high of Rs 2,264 on February 12 after Motilal Oswal retained its bullish stance. The stock also hit a fresh 52-week high.

Ircon International share price jumped over 4 percent on February 12 after the company reported strong numbers and recommended the sub-division of its equity shares.

Suven Life: Suven Life Sciences share price was locked at 5 percent upper circuit after the company's promoters were reportedly looking to sell their CRAMS business.

SPARC: Shares of Sun Pharma Advanced Research Company (SPARC) plunged almost 10 percent after the USFDA rejected its cancer drug application for Taclantis in its current form.

Wockhardt share price fell 7 percent on February 12 as the company will not use the cash raised from slump sale for debt reduction.

Technical View:

Nifty formed a bullish candle.

Supertrend indicator signals buy.

The last time when Supertrend indicator gave a buy signal was on 14 Jan and Nifty registered all-time high of 12430 on Jan 20.

The index also closed above crucial short term moving average of 50-DMA placed at 12123

MACD also gave a bullish crossover back on 10 February

The index continues to remain vulnerable for a sell off despite bulls succeeding in putting up a brave posture, suggest experts.

Hence, as long as this index sustains above 12144 levels then an initial target of 12266 can be expected and beyond that 12350 – 12400

If the index closes below 12,144 then a fresh leg of downswing shall unfold with initial targets of 11,990.

Shorting should be considered on a close below 12144 for an initial target of 11990