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Last Updated : Jun 17, 2019 07:37 AM IST | Source: Moneycontrol.com

A morning walk down Dalal Street | Decisive range breakout is necessary to commence next leg of rally

Nifty has been consolidating in between 11,761 to 12,041 zones from fourteen trading sessions and requires a decisive range breakout to commence the next leg of rally else it is likely to move in this broader trading range, experts said.

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A volatile week for India markets. Benchmark indices might have moved in a narrow range, but the big carnage was seen in the small & midcaps which fell up to 30 percent in five trading sessions.

Indian markets ended the week on a negative note with cash strap, and debt-laden companies bear the brunt of brutal sell-off. The sell-off intensified on Friday afternoon on news reports that India would impose retaliatory tariffs on US goods.

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The S&P BSE Sensex fell 0.4 percent compared to 1.2 percent fall seen in the S&P BSE Midcap and about 2 percent drop seen in the S&P BSE Smallcap index.

The S&P BSE500 index which represents nearly 93 percent of the total market capitalization on the BSE fell 0.7 percent in the same period.

The fall in the index was led by stocks from both Small & Midcap space which include names like The Lakshmi Vilas Bank, Indiabulls Real Estate, Dilip Buildcon, Jaiprakash Associates, Reliance Power, Yes Bank, Reliance Capital, and Jet Airways among others.

The Indian rupee June 14 fell by another 30 paise to close at 69.80 against the US currency as strengthening greenback and rising crude oil prices kept investors cautious.

On the institutional front, FPIs were net sellers in Indian markets for Rs 238 crore while DIIs were net sellers to the tune of Rs 376 crore, provisional data showed.

Big News:

FIIs have turned net sellers again so far in June after pulling out more than Rs 2000 crore in May from Indian equity markets

After pouring in more than Rs 3000 crore on June 3 when Nifty hit a record highs, the momentum has gone down

FIIs have been mostly net buyers in Indian markets so far in 2019 for more than Rs 50,000 crore

Slowdown in liquidity from FIIs will keep our markets gyrating in a narrow range at least in the short term

FIIs are also watching June US FOMC meeting which is due this week and the commentary of Fed Chairman on future trajectory of rates

The S&P index extended gains last week as market participants are pricing in that Fed may become dovish in June policy meeting.

Technical Recommendations:

The Nfity50 formed a Bearish Belt Hold pattern on daily charts on Friday and a bearish candle for the second consecutive week in a row

It has been consolidating in between 11,761 to 12,041 zones from fourteen trading sessions and requires a decisive range breakout to commence the next leg of rally else it is likely to move in this broader trading range, experts said.

If bulls manage to defend 11,769 levels, then consolidation process can be expected to continue with initial targets present around 11,930. For time being experts advise traders to avoid long positions on the index.

Three levels: 11797, 11911, 12040-12103

Max Call OI: 12000, 12500

Max Put OI: 11500, 11800

Stocks in news:

Drug firm Laurus Labs June 14 said the US health regulator has made two observations after the inspection of its Visakhapatnam facility in Andhra Pradesh.

Tata Power June 14 said its arm Coastal Gujarat Power Ltd (CGPL) has raised Rs 1,110 crore through issuance of non-convertible debentures (NCDs) on private placement basis, for refinancing existing debt, capital expenditure and augmentation of working capital.

Graphite India has sought the shareholders' nod to raise upto Rs 5,000 crore to meet the company's resource requirements including capex and acquisitions.

Technical Recommendations:

We spoke to Angel Broking and here’s what they have to recommend:

PI Industries: Buy| Target: Rs. 1170.05| Target: Rs 1250| Stop Loss: Rs 1128| Upside 7%

Wockhardt: Buy| LTP: Rs 387.25| Target: Rs 424| Stop Loss: Rs 373| Upside 10%

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
First Published on Jun 17, 2019 07:14 am
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