After surging around 1% during the last couple of sessions, the benchmark indices remained choppy in yesterday’s session. The index Nifty oscillated in a narrow band of around 60 points to close extremely flat. Although the index remained flat but decent buying was observed in individual stock which resulted in a strong market breadth. Meanwhile, Nifty Bank index gained 100 points from its previous close. Right from the beginning of the session, due to broad based buying the breadth remained positive. On the sectoral front, NIFTY PSU BANK (+1.72%) and NIFTY MEDIA (+1.07%) stocks remained upbeat whereas the NIFTY IT (-0.91%) and NIFTY PHARMA (-0.12%) remained a bit under pressure. From the F&O space, DHFL (+9.41%), IBULHSGFIN (+7.57%) and PEL (+5.06%) were the top gainers.
Post yesterday’s session, the index Nifty has managed to close above the initial resistance of 11911. Now, at this juncture, it is hovering below 12000 which is the 78.6% Fibonacci retracement levels and also a psychological mark. Thus going ahead, 12000 will remain a strong level to watch out for. A move above the same might bring in further buying which can pull the index towards new high. On the other hand, 11880 might act as intermediate support for the coming session. A move below the same could result in some profit booking. With regards to NIFTY BANK, 31500 is a strong resistance on chart as well as due to OI concentration in CE options. Only a breach of the same shall result in further upside. The support on the downside is at 31100 for BANKNIFTY.
Posted by Mehul Kothari | Published on 01-JUL-2019
MARKET OUTLOOK
As discussed in our previous report, 50 DEMA acted as a support for NIFTY and we witnessed a breakout above 11850 mark. Now at this juncture, NIFTY has formed an intermediate swing high of 11911. Also, the daily chart of Nifty Bank index depicts a ‘Shooting Star’ candlestick pattern which is a reversal one and that too exactly at 78.6% Fibonacci retracement level of the previous move. Thus, there could be some consolidation or profit booking going ahead. But the trend is likely to remain strong till the time 11600 is not breached in Nifty. On the downside, NIFTY has a support of 11700 – 11600 while the upside hurdle is at 11920. A move above 11920 might pull the index towards life high. Note : Kindly go through the attached report for detailed outlook.Click Here to Download the ReportDisclaimer)
Posted by Mehul Kothari | Published on 04-JUL-2019
‘Divergence leads to Convergence’ Thematic Budget Picks 2019
Till October 2018, the broader market indices MIDCAP 100 and SMALLCAP 100 were moving in tangent with the benchmark indices. Since then, NIFTY surged around 20% due to substantial buying in heavyweights while the small and midcap stocks maintained their southward journey due to lack of buying interest. This has created a divergence between all the three indices as displayed above.
Currently, the NIFTY MIDCAP 100 index is almost 18% away from its all-time high whereas the NIFTY SMALLCAP 100 index is away by 35%. Now we believe that generally a ‘Divergence leads to Convergence’ and going by that theory there could be three possible scenarios from here on.
Best Case Scenario: Let’s assume that post budget, NIFTY 50 rallies further. In this case, the broader markets will have more to catch-up and that could trigger fresh upside in the MID and SMALL cap stocks.
Stagnant Scenario: In case of some consolidation in NIFTY 50, there is again a possibility that the broader markets outperform due to attractive pricing.
Worst Case Scenario : In a worst case scenario, if NIFTY 50 undergoes correction and try to catch- up with the broader markets then even in this condition the downside could be limited in MIDCAP and SMALLCAP stocks due to oversold conditions. Post which ensuing rally will likely leadership coming from Mid and Small cap basket.
Thus we expect that the next leg of rally in the markets could be finally for MIDCAP and SMALLCAP stocks.
Outlook
The MIDCAP 100 index peaked out around 22K mark in Jan 2018 and met the 16K mark. Then after, the index found support exactly at the placement of 200 week’s average which indicates strength. The support coincides with the retracement levels of the previous rally. Since then the index has been oscillating in a broad range and currently it is on the verge of breakout from the falling trend line.
Even the placement of weekly RSI indicates a possibility of breakout. In such scenario, the index could race towards 20000 mark. The view would be negated below 16400 mark.
Outlook
The corrective move from the peak of 9600 got settled near 5600 level which is the placement of 89 months EMA. The index has been consolidating since then and the mentioned zone coincides with its previous multiyear breakout as displayed on the chart. As per the historical price behaviour we have observed that normal the index turns from its key retracement levels in case of any strong correction.
At this time too, the index retraced almost 78.6% of its previous rally. The quarterly chart displayed a ‘Hammer’ formation which has a reversal nature. Thus we expect fresh buying interest in the small cap stocks which has been lagging behind since quite some time. The view on the index would be negated below 5660 and on the upside it has a potential to reach 7500 mark.
Outlook
Post a corrective move from 1100, currently the stock is resting near 600 mark which is the placement of 100 months EMA (Exponential Moving Average).
The structure on the monthly chart has taken a shape of ‘Bullish Wolfe Wave’ pattern which indicates reversal.
Even the monthly RSI is turning from the trend line support which might result in bounce from here on.
Traders can accumulate the stock between 630 - 600 with a stop below 560 for the upside target of 698 - 753 in the coming months.
Outlook
Similar to AMARA RAJA, even Escorts is turning from a larger degree moving average but here its 200 Weeks moving average.
As displayed on chart, since many years this average has been like a sheet anchor for the stock.
Due to a ‘Wolfe Wave’ kind of formation we expect a decent recovery in the stock.
Traders can accumulate the stock between 570 - 550 with a stop below 500 for the upside target of 650 - 710 in the coming months.
Outlook
Given above is the monthly Heikin-Ashi chart of INDIACEM. This kind of charts are used to know when to stay in trades while a trend persists but get out when the trend pauses or reverses.
At this juncture, the change in colour from red to blue indicates a trend reversal.
Previously this technique has worked in INDIACEM and this time the reward to risk ratio is quiet lucrative.
Traders can accumulate the stock between 104 - 90 with a stop below 74 for the upside target of 132 – 155 in the coming months.
Outlook
The given above monthly chart of JUBILANT depicts that the stock has been near the previous multiyear breakout zone.
This zone coincides with the placement of 100 months EMA and 78.6% Fibonacci retracement level of previous rally.
Further we are witnessing a ‘Hammer’ candlestick pattern which signals a reversal.
Traders can accumulate the stock between 498 - 480 with a stop below 430 for the upside target of 578 - 637 in the coming months.
Outlook
The weekly chart of NCC displays that since quite some time the band of 100 and 200 weeks moving average has been acting as a support for the stock.
Even at this point in time, NCC is hovering above the same kind of band created by the averages.
In addition to that, the stock has been respecting the support formed by the rising trend line.
Traders can accumulate the stock between 98 - 92 with a stop below 77 for the upside target of 122 - 140 in the coming months.
Outlook
The monthly chart of TATAELXI displays a typical ‘Impulse-corrective-Impulse’ structure.
The stock is turning from its 50 months EMA and trend line support followed by 61.8% retracement level.
We are also witnessing a hidden positive divergence in RSI which augurs for fresh rally.
Traders can accumulate the stock between 920 – 900 with a stop below 800 for the upside target of 1075 - 1185 in the coming months.
Outlook
Right from the year 2007, TATAPOWER has been trading in a contracting range as displayed above.
In the year 2016, the stock confirmed a ‘Double Bottom’ formation exactly at the lower end of broader range and rallied.
Similar kind of structure is seen this time and we have a breakout too.
Traders can accumulate the stock between 72 - 68 with a stop below 58 for the upside target of 88 - 100 in the coming months.
Click Here to Download the Report
Disclaimer: This document has been prepared by IndiaNivesh Securities Limited (“INSL”), for use by the recipient as information only and is not for circulation or public distribution. INSL includes subsidiaries, group and associate companies, promoters, employees and affiliates. This document is published in accordance with Regulation 18 of the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. INSL researches, aggregates and faithfully reproduces information available in public domain and other sources, considered to be reliable and makes them available for the recipient, though its accuracy or completeness has not been verified by INSL independently and cannot be guaranteed. This document is not to be altered, transmitted, reproduced, copied, redistributed, uploaded or published or made available to others, in any form, in whole or in part, for any purpose without prior written permission from INSL. This document is solely for information purpose and should not to be construed as an offer to sell or the solicitation of an offer to buy any security. Recipients of this document should be aware that past performance is not necessarily a guide for future performance and price and value of investments can go up or down. The suitability or otherwise of any investments will depend upon the recipients particular circumstances. INSL does not take responsibility thereof. The information contained in this document has been obtained from sources that are considered as reliable though its accuracy or completeness has not been verified by INSL independently and cannot be guaranteed. INSL has not independently verified all the information contained within this document. The research analysts of INSL have adhered to the code of conduct under Regulation 24 (2) of the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. Nothing in this document constitutes investment, legal, accounting and/or tax advice or a representation that any investment or strategy is suitable or appropriate to recipients’ specific circumstances. INSL does not accept any responsibility or whatever nature for the information, assurances and statements given or made available herein or for any omission or for any liability arising from the use of this document. Information mentioned is the current information as of the date appearing on this document only. INSL directors/ employees and its clients may have holdings in the stocks mentioned in the document.This report is based on technical and derivative analysis on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. Following table contains the disclosure of interest in order to adhere to utmost transparency in the matter.
INSL, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. This information is subject to change, as per applicable law, without any prior notice. INSL reserves the right to make modifications and alternations to this statement, as may be required, from time to time.)
Share Market Today - 4th July 2019
NIFTY DAILY CHART
After surging around 1% during the last couple of sessions, the benchmark indices remained choppy in yesterday’s session. The index Nifty oscillated in a narrow band of around 60 points to close extremely flat. Although the index remained flat but decent buying was observed in individual stock which resulted in a strong market breadth. Meanwhile, Nifty Bank index gained 100 points from its previous close.
Right from the beginning of the session, due to broad based buying the breadth remained positive. On the sectoral front, NIFTY PSU BANK (+1.72%) and NIFTY MEDIA (+1.07%) stocks remained upbeat whereas the NIFTY IT (-0.91%) and NIFTY PHARMA (-0.12%) remained a bit under pressure. From the F&O space, DHFL (+9.41%), IBULHSGFIN (+7.57%) and PEL (+5.06%) were the top gainers.
Post yesterday’s session, the index Nifty has managed to close above the initial resistance of 11911. Now, at this juncture, it is hovering below 12000 which is the 78.6% Fibonacci retracement levels and also a psychological mark. Thus going ahead, 12000 will remain a strong level to watch out for. A move above the same might bring in further buying which can pull the index towards new high.
On the other hand, 11880 might act as intermediate support for the coming session. A move below the same could result in some profit booking. With regards to NIFTY BANK, 31500 is a strong resistance on chart as well as due to OI concentration in CE options. Only a breach of the same shall result in further upside. The support on the downside is at 31100 for BANKNIFTY.
Disclaimer
Previous Story
Weekly BSE & NSE Gainers & Losers - 24th June to 28th June 2019
MARKET OUTLOOK As discussed in our previous report, 50 DEMA acted as a support for NIFTY and we witnessed a breakout above 11850 mark. Now at this juncture, NIFTY has formed an intermediate swing high of 11911. Also, the daily chart of Nifty Bank index depicts a ‘Shooting Star’ candlestick pattern which is a reversal one and that too exactly at 78.6% Fibonacci retracement level of the previous move. Thus, there could be some consolidation or profit booking going ahead. But the trend is likely to remain strong till the time 11600 is not breached in Nifty. On the downside, NIFTY has a support of 11700 – 11600 while the upside hurdle is at 11920. A move above 11920 might pull the index towards life high. Note : Kindly go through the attached report for detailed outlook.Click Here to Download the ReportDisclaimer)
Next Story
Budget 2019 Stocks to Buy – Best Mid Cap & Small Cap Stocks
‘Divergence leads to Convergence’ Thematic Budget Picks 2019 Till October 2018, the broader market indices MIDCAP 100 and SMALLCAP 100 were moving in tangent with the benchmark indices. Since then, NIFTY surged around 20% due to substantial buying in heavyweights while the small and midcap stocks maintained their southward journey due to lack of buying interest. This has created a divergence between all the three indices as displayed above. Currently, the NIFTY MIDCAP 100 index is almost 18% away from its all-time high whereas the NIFTY SMALLCAP 100 index is away by 35%. Now we believe that generally a ‘Divergence leads to Convergence’ and going by that theory there could be three possible scenarios from here on. Best Case Scenario: Let’s assume that post budget, NIFTY 50 rallies further. In this case, the broader markets will have more to catch-up and that could trigger fresh upside in the MID and SMALL cap stocks. Stagnant Scenario: In case of some consolidation in NIFTY 50, there is again a possibility that the broader markets outperform due to attractive pricing. Worst Case Scenario : In a worst case scenario, if NIFTY 50 undergoes correction and try to catch- up with the broader markets then even in this condition the downside could be limited in MIDCAP and SMALLCAP stocks due to oversold conditions. Post which ensuing rally will likely leadership coming from Mid and Small cap basket. Thus we expect that the next leg of rally in the markets could be finally for MIDCAP and SMALLCAP stocks. Outlook The MIDCAP 100 index peaked out around 22K mark in Jan 2018 and met the 16K mark. Then after, the index found support exactly at the placement of 200 week’s average which indicates strength. The support coincides with the retracement levels of the previous rally. Since then the index has been oscillating in a broad range and currently it is on the verge of breakout from the falling trend line. Even the placement of weekly RSI indicates a possibility of breakout. In such scenario, the index could race towards 20000 mark. The view would be negated below 16400 mark. Outlook The corrective move from the peak of 9600 got settled near 5600 level which is the placement of 89 months EMA. The index has been consolidating since then and the mentioned zone coincides with its previous multiyear breakout as displayed on the chart. As per the historical price behaviour we have observed that normal the index turns from its key retracement levels in case of any strong correction. At this time too, the index retraced almost 78.6% of its previous rally. The quarterly chart displayed a ‘Hammer’ formation which has a reversal nature. Thus we expect fresh buying interest in the small cap stocks which has been lagging behind since quite some time. The view on the index would be negated below 5660 and on the upside it has a potential to reach 7500 mark. Outlook Post a corrective move from 1100, currently the stock is resting near 600 mark which is the placement of 100 months EMA (Exponential Moving Average). The structure on the monthly chart has taken a shape of ‘Bullish Wolfe Wave’ pattern which indicates reversal. Even the monthly RSI is turning from the trend line support which might result in bounce from here on. Traders can accumulate the stock between 630 - 600 with a stop below 560 for the upside target of 698 - 753 in the coming months. Outlook Similar to AMARA RAJA, even Escorts is turning from a larger degree moving average but here its 200 Weeks moving average. As displayed on chart, since many years this average has been like a sheet anchor for the stock. Due to a ‘Wolfe Wave’ kind of formation we expect a decent recovery in the stock. Traders can accumulate the stock between 570 - 550 with a stop below 500 for the upside target of 650 - 710 in the coming months. Outlook Given above is the monthly Heikin-Ashi chart of INDIACEM. This kind of charts are used to know when to stay in trades while a trend persists but get out when the trend pauses or reverses. At this juncture, the change in colour from red to blue indicates a trend reversal. Previously this technique has worked in INDIACEM and this time the reward to risk ratio is quiet lucrative. Traders can accumulate the stock between 104 - 90 with a stop below 74 for the upside target of 132 – 155 in the coming months. Outlook The given above monthly chart of JUBILANT depicts that the stock has been near the previous multiyear breakout zone. This zone coincides with the placement of 100 months EMA and 78.6% Fibonacci retracement level of previous rally. Further we are witnessing a ‘Hammer’ candlestick pattern which signals a reversal. Traders can accumulate the stock between 498 - 480 with a stop below 430 for the upside target of 578 - 637 in the coming months. Outlook The weekly chart of NCC displays that since quite some time the band of 100 and 200 weeks moving average has been acting as a support for the stock. Even at this point in time, NCC is hovering above the same kind of band created by the averages. In addition to that, the stock has been respecting the support formed by the rising trend line. Traders can accumulate the stock between 98 - 92 with a stop below 77 for the upside target of 122 - 140 in the coming months. Outlook The monthly chart of TATAELXI displays a typical ‘Impulse-corrective-Impulse’ structure. The stock is turning from its 50 months EMA and trend line support followed by 61.8% retracement level. We are also witnessing a hidden positive divergence in RSI which augurs for fresh rally. Traders can accumulate the stock between 920 – 900 with a stop below 800 for the upside target of 1075 - 1185 in the coming months. Outlook Right from the year 2007, TATAPOWER has been trading in a contracting range as displayed above. In the year 2016, the stock confirmed a ‘Double Bottom’ formation exactly at the lower end of broader range and rallied. Similar kind of structure is seen this time and we have a breakout too. Traders can accumulate the stock between 72 - 68 with a stop below 58 for the upside target of 88 - 100 in the coming months. Click Here to Download the Report Disclaimer: This document has been prepared by IndiaNivesh Securities Limited (“INSL”), for use by the recipient as information only and is not for circulation or public distribution. INSL includes subsidiaries, group and associate companies, promoters, employees and affiliates. This document is published in accordance with Regulation 18 of the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. INSL researches, aggregates and faithfully reproduces information available in public domain and other sources, considered to be reliable and makes them available for the recipient, though its accuracy or completeness has not been verified by INSL independently and cannot be guaranteed. This document is not to be altered, transmitted, reproduced, copied, redistributed, uploaded or published or made available to others, in any form, in whole or in part, for any purpose without prior written permission from INSL. This document is solely for information purpose and should not to be construed as an offer to sell or the solicitation of an offer to buy any security. Recipients of this document should be aware that past performance is not necessarily a guide for future performance and price and value of investments can go up or down. The suitability or otherwise of any investments will depend upon the recipients particular circumstances. INSL does not take responsibility thereof. The information contained in this document has been obtained from sources that are considered as reliable though its accuracy or completeness has not been verified by INSL independently and cannot be guaranteed. INSL has not independently verified all the information contained within this document. The research analysts of INSL have adhered to the code of conduct under Regulation 24 (2) of the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. Nothing in this document constitutes investment, legal, accounting and/or tax advice or a representation that any investment or strategy is suitable or appropriate to recipients’ specific circumstances. INSL does not accept any responsibility or whatever nature for the information, assurances and statements given or made available herein or for any omission or for any liability arising from the use of this document. Information mentioned is the current information as of the date appearing on this document only. INSL directors/ employees and its clients may have holdings in the stocks mentioned in the document.This report is based on technical and derivative analysis on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. Following table contains the disclosure of interest in order to adhere to utmost transparency in the matter. INSL, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. This information is subject to change, as per applicable law, without any prior notice. INSL reserves the right to make modifications and alternations to this statement, as may be required, from time to time.)