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Last Updated : Sep 06, 2019 09:08 AM IST | Source: Moneycontrol.com

A morning walk down Dalal Street | Investors can start accumulating large & quality midcap stocks

Analysts advise investors to wait for either a breakout above 11,042 or a breakdown below 11,746 before initiating fresh positions.

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A volatile day for Indian markets which indicates that there is some nervousness among the bulls as well as the bears.

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The final tally on D-Street – the S&P BSE Sensex slipped 80 points to 36,644 while the Nifty50 closed with gains of 3 points at 10,847.

Auto, Consumer durable, capital goods stocks did well in Thursday’s market thanks to RBI’s directive to banks to link their MCLR to external benchmark rates.

The S&P BSE Auto index closed with gains of more than 2%, Consumer Durable gained 0.92%, and Capital Goods was up 0.84%

The rupee settled for the day with gains of 28 paise at 71.84 against the US dollar on Thursday as investor sentiment revived after China and the United States said they will resume trade talks.

On the institutional front, FPIs were net sellers in Indian markets for Rs 561 cr while the DIIs were net buyers to the tune of Rs 699 cr, provisional data showed.

Big News:

The Nifty50 is down by over 10 percent from its record high of 12,103 recorded on June 3 but there are more than 20 stocks which are trading with a steep discount of more than 50 percent in the Nifty500 index.

As many as 22 stocks in the Nifty500 index fell 50-90% from June 3rd which include names like RBL Bank, PC Jeweller, YES Bank, Coffee Day, Reliance Capital, Jet Airways, Reliance Home Finance, and Cox & Kings.

Most of the stocks which witnessed a huge selloff have some structural or fundamental reason attached to it hence some of them might not qualify as a value buy, and will be best to avoid catching the falling knife.

Most experts feel that it could take 2 or more quarters for the measure to start reflecting on the balance sheet of India Inc. and GDP rate, but investors could start accumulating large and quality midcaps for their portfolio.

Technical View:

Nifty formed a Doji pattern on the daily charts

The index witnessed profit-taking at higher levels near 5-day exponential moving average but found support near 10,800 levels. The index finally closed with marginal gains of 3.25 points to 10,847.

The formation of a doji candle after a bullish candle indicates there is some indecisiveness among the bulls as well as the bears.

Analysts advise investors to wait for either a breakout above 11,042 or a breakdown below 11,746 before initiating fresh positions.

Three levels: 10746, 10920, 11000

Max Call OI: 11200, 11700

Max Put OI: 10800, 10600

Stocks in news:

Telecom stocks will be in focus after Reliance Jio Infocomm launched the much-awaited JioFiber with prices starting as low as Rs 699 per month and all the way up to Rs 8,499 per month for speeds up to 1 Gbps.

Owing to the slowdown in the automobile industry, Mahindra & Mahindra has deferred its planned capex of around Rs 1,000 crore by a year, which, if not reversed within this fiscal, would lead to more job losses in the sector, the company's MD Pawan Goenka said on Thursday.

JSW Steel: The National Company Law Tribunal (NCLT) on Thursday approved JSW Steel Ltd.’s $2.7 billion bid for Bhushan Power & Steel Ltd., the second major steel asset the mill has bagged under the nation’s new insolvency process.

Technical Recommendations:

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

State Bank of India: Buy| CMP: Rs.273 | Target: Rs 290 |Stop Loss: Rs.260 | Upside 6.2%

HDFC Bank: Buy| CMP: Rs.2235 | Target: Rs 2375 |Stop Loss: Rs.2225 | Upside 4.4%

LIC Housing Finance: Sell| CMP: Rs.395 | Target: Rs 330 |Stop Loss: Rs.440 | Downside 16%

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.



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First Published on Sep 6, 2019 07:23 am
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