Fresh record highs for both Sensex and Nifty. The index closed above its crucial resistance level of 11550 on Monday and if the momentum continues in Tuesday’s session there is a higher probability that the index might inch towards 11600.
This is the 23rd time the Nifty has closed at a new high this calendar year. 13 of the 23 highs came in January and the rest 10 after that.
Positive global cues, recovery in rupee, fall in crude oil prices and in-line Q1 results season provided much-needed comfort to the bulls to continue their buying spree.
The rupee also strengthened about 40 paise and the yield on the 10-year Treasuries fell by 3 basis points.
Just concluded earnings season has confirmed that Indian corporate earnings have become robust, even though hiccups remain from PSU banks, suggest experts.
On the technical front, initial target on the upside is at 11640 with the potential to stretch till 11840.
On the other hand, the gap area of 11500-11486 shall act as an immediate support zone with major support at 11340 which should also be your stop loss.
A big thumbs up has come from Fitch for India
A fall in rupee will have limited impact on India's sovereign credit rating
Although India’s foreign reserves have dipped by USD 24 billion since mid-April 2018, the country still has reserves to cover 7.2 months of current account payments if Reserve Bank of India (RBI) felt the need to intervene on a larger scale.
However, companies that rely heavily on imports as inputs, operate with significant foreign-currency debt and generate revenue denominated in local currency are susceptible to the effects of a weakening rupee.
The report flagged airline, telecom, auto, chemical, and fertiliser sectors as being the most vulnerable.
Nifty forms a strong bullish candle on daily charts
It closed above 11550 for the first time in history and is in un-chartered territory
Traders can use buy on dips approach as long as Nifty trades above 11340
Three levels: 11340, 11400, 11640
Max Call OI: 11500, 11600
Max Put OI: 11400, 11300
We spoke to HDFC Securities and here’s what they have to recommend:
Tech Mahindra Ltd: Buy| LTP: Rs 688 | Target: Rs 730 | Stop loss: Rs 665 | Return: 6%
RBL Bank: Buy| LTP: Rs 591 | Target: Rs 640 | Stop loss: Rs 565 | Return: 8%
Amara Raja Batteries: Buy| LTP: Rs 892| Target: Rs 980 | Stop loss: Rs 845 | Return: 10%Disclaimer
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