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Last Updated : May 08, 2019 07:02 AM IST | Source: Moneycontrol.com

A morning walk down Dalal Street | Index has room for more weakness, short Nifty for target of 11,250

Traders can use bounceback to short Nifty for a target of 11250 and a stop loss above 11600 levels, suggest experts.

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Bears took control of D-street in the last one hour of trade and pushed the Nifty50 below crucial support levels on Tuesday.

It was a roller coaster ride for investors as Nifty which started trading with a gap on the upside failed to hold onto the gains and closed the day with losses of over 100 points while Sensex plunged by more than 300 points.

The S&P BSE Sensex finally closed 323 points lower at 38,276 while the Nifty50 was down by 100.35 points to end at 11497.

Investors lost more than Rs 1 lakh crore in terms of market capitalisation in a single session. The average market capitalisation of BSE listed companies fell from Rs 150.37 lakh crore on May 6, to Rs 149.11 lakh crore on May 7 which translates into a fall of Rs 1.26 lakh crore.

The Nifty index closed below its crucial support placed at 11550-11500 levels. It appears to have registered a consolidation breakdown from its 19-day old range present between 11,850 – 11,550 levels. The recent fall has now opened room for traders to go short.

The rupee Tuesday slipped further by 3 paise to close at 69.43 against the US currency due to fag-end dollar demand from banks and importers amid sustained foreign fund outflows.

On the institutional front, FPIs were net sellers in Indian markets for Rs 645 crore while the DIIs were net buyers to the tune of Rs 818 cr, provisional data showed.

Big News:

As many as 43 companies will declare their results for March quarter which include names like Alembic Pharma, Dhanlaxmi Bank, Gillette India, JK Paper, Titan Company, and Tata Communications etc. among others.

Alembic Pharma: PAT likely to fall by 2% YoY to Rs 91 crore

Titan Company: PAT likely to grow by 24% YoY to Rs 388 crore

Tata Communications: PAT likely to grow by 79% YoY to Rs 73 crore

Technical View:

Nifty forms a bearish candle on the charts for the fifth consecutive day in a row

The index is trading well below crucial short term moving averages

A break below 11500 has opened room for more weakness

Traders can use bounceback to short Nifty for a target of 11250 and a stop loss above 11600 levels, suggest experts

Three levels: 11484, 11657, 11700

Max Call OI: 12000, 12500

Max Put OI: 11000, 11500

Stocks in news:

Metals & mining firm Vedanta's March quarter consolidated profit fell a sharp 43.3 percent year-on-year (YoY) to Rs 3,218 crore. Profit in the year-ago period stood at Rs 5,675 crore.

Engineering and farm equipment maker Escorts May 7 said its net profit rose 7.8 per cent to Rs 121.35 crore for March quarter 2019, aided by robust tractor sales.

Drug firm Lupin on May 7 said it has received tentative nod from the US health regulator to market its Fosaprepitant for injection, used to prevent nausea and vomiting associated with cancer chemotherapy.

Technical Recommendations:

We spoke to SMC Global Securities and here's what they have to recommend:

Chennai Petroleum Corporation: Sell| Target: Rs 230| Stop Loss: Rs 260| Downside 7%

Blue Star: Buy| Target: Rs 815| Stop Loss: Rs 680|Upside 11%

Mold-Tek Technologies: Buy| Target: Rs 63| Stop Loss: Rs 51| Upside 14%

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.
First Published on May 8, 2019 07:02 am
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