INSUBCONTINENT EXCLUSIVE:
SAMEET CHAVANChief Analyst -- Technical derivativesm Angel BrokingWhere are We?Market participants had to undergo a lot of stress as we
The pain is still not out of the system as we can see some indecisive swings thereafter
In the midst of it all, the market is at a very interesting juncture.
What is in Store? This week, the benchmark index did nothing as we
But the question remains: Are we going to see sustained rally from here or not? This would probably be the toughest question to answer
But, we are still hopeful as we can see the bulls trying to flex their muscles a bit and hence expect some good days to come
Do?Although the follow-up move is lacking, one should remain upbeat as long as the recent swing low of 11090 is intact
The banking index has been a laggard of late, which needs to step up and we expect it to happen soon
From the automobile sector, we continue to like Maruti, Bajaj Auto and Bharat Forge
Banking giant SBI posted stellar numbers on Friday which has lit up the entire PSU banking basket
In the F-O mid-cap space, we have been persistently advising Sun TV, MGL and Tata Elxsi, they are likely to extend their bull run
In the paint space, Kansai Nerolac is poised for some catch-up rally to its larger peers.
ANDEEP PORWALTechnical analyst, Ashika Stock
BrokingWhere are We? The festive mood and state election verdicts failed to cheer up the market
The index traded on a subdued note since the beginning of the week gone by
Quarterly earnings acted as a trigger for stock-specific volatility
On the sectoral front, the IT index remains a major underperformer with a drop of 3% while bargain hunting trades were being observed in PSU
banks in the week gone by.
What is in Store? Trend exhaustion is being observed in the benchmark index as price remains below the overhead
resistance post the reversal from the key Fibonacci ratio of 61.80% (reference range of 10670-11695).The formation of indecisive and
reversal candlesticks near the trendline of a downward sloping channel on the daily chart confirms that price remains near the point of
We are likely to see selling pressure mounting till the time the index trades below the intermediate high of 11715
The bearish view negates in the event of a breakout above the overhead resistance
In the short-term, key support remains at the level of 11300.
What Should Investors Do? Traders and investors should remain on the edge
given the swift turn of the tide because of a lack of follow-up in both the scenarios of long and short
However, swing trading certainly is a good strategy/approach to make most out of the prevailing phase
Stock specific, we recommend longs in Mindtree, TCS and SBI and expect a short-term rally; while Bajaj Finserv and CESC are likely to trade
bigbang corporate tax cut announcement, that saw the index moving from levels of ~10700 to 11700 in just two trading sessions, after which
we have seen about 21 sessions of consolidation
In this period, we saw the Nifty unable to manage to close above 11600 despite multiple attempts
The ongoing earnings season seems to be decent so far with very few misses for Nifty50.
What is in Store?Two sectors where we believe
institutional investors are most focussed are private sector banks (financials continue to hold high weights) as well as FMCG companies
Both these sectors continue to witness good amount of accumulation as well as long build-up.
What Should Investors Do? For the Nifty, we
will advise to go long in case of mean reversion to short-term averages that lie in the range of 11300-11400 or in case of sustainable close
above 11650 (at least two trading sessions)
A breakout on the upside will lead to the Nifty moving towards 11950-12000
We remain positive on private banks (Axis, ICICI - HDFC Bank); FMCG (HUL and Dabur) auto (Ashok Leyland, Bajaj Auto and Eicher)
Contra traders can look at an opportunity to buy into select stocks from metals (Tata Steel), PSUs (SBI, GAIL, SAIL and PFC)
On other hand, we are concerned with IT (Infy and Mindtree) and NBFCs
Participants may also look at shorting strangles for the next month specifically in names where earnings have been out and momentum seems to
have subsided: TCS, Hero MotoCorp, L-T, Bajaj Finance, Kotak Bank and ACC.