Nifty may move towards 11,200 by week end; RIL likely to hit fresh record high: Globe Capital

Himanshu Gupta

Nifty witnessed a strong recovery on August 4 led by gains primarily in Reliance Industries (RIL) and HDFC Bank. The bulls took control right from the word go and cornered the bears who were looking highly dominant in the previous two sessions. The minor correction is seen fading out looking at the strong buying in the benchmark after the testing its 20-day EMA on Monday. We expect the buying momentum to extend in the near-term where the Nifty might attempt to scale up towards 11,200 by this week's expiry where once again a fresh view can be taken.

IT, Pharma and Consumption continue to remain strong pockets, while it will be interesting to see whether the financials after one day of strength would be able to build on further gains hereafter. If the rally continues in financials, Nifty may take on the recent highs. Reliance Industries continues to defy gravity and with the kind of buying seen on Tuesday it also looks geared up to hit new all-time highs.

Bank Nifty managed to hold on to its crucial support of 21,000-20,950 and marked a crucial recovery, although the short-term trend still continues to be weak. However, as long as 21,000 is held, there might be some consolidation if not sustained buying. In the near term, 21,800-22,000 will continue to be the immediate area of supply, which is also visible looking at this week's expiry option data. We would advise buying Bank Nifty on some dips towards 21,300 for targets of 21,750-21,800. Also, any fresh short trade should only be initiated once 21,000 is broken on the downside.

Himanshu Gupta

Vice President - Research| Globe Capital Markets Ltd

• 'Earnings recovery can pick up steam from Q2 if world controls COVID-19 in Q1'

• Budget 2020: 'Market factoring in 50- 75 bps slippage in fiscal deficit target'

• 'See Sensex at 43,000 by March, MSCI index rebalancing will attract more FIIs'

Here is the list of three stocks which can be bought for the short-term:

Balkrishna Industries: Buy around Rs 1,325 | Target: Rs 1,380 | Stoploss: Rs 1,300

The stock has given a fresh breakout recently after consolidating for a few weeks. The counter has cleared the supply zone prevailing around Rs 1,250-1,300 zone and the price pattern is suggesting that it is poised for a big breakout in the near-term. A positive crossover in the momentum indicators along with the placement of short/medium-term moving averages is also signalling a buy in the stock.

Aurobindo Pharma: Buy around Rs 855 | Target: Rs 895 | Stoploss: Rs 845

Aurobindo Pharma has been an outperformer and the stock has recently hit an all-time high on Monday. Bulls are highly active in the counter which was visible looking at the smart recovery in the stock on Tuesday from the lows. Rs 845-850 range is likely to act as strong support which had been an area of supply in the past. We expect to see fresh highs in the counter and therefore recommend a buy on stock for targets of Rs 895.

Godrej Properties: Buy around Rs 926 | Target: Rs 970 | Stoploss: Rs 900

The stock has broken out from consolidation on the daily charts suggesting a sharp upside in the near-term. As per Elliot Wave analysis, the stock has completed consolidation within the wave 4 of the 5 impulse wave structure and has now started to unfold in the 5th wave higher. We expect the stock to move higher in coming days and therefore recommend a buy for a target price of Rs 970-990.

The author is VP Research at Globe Capital.

Disclaimer: 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.