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Last Updated : May 20, 2019 07:45 AM IST | Source: Moneycontrol.com

A morning walk down Dalal Street | Nifty likely to see gap up opening, rally towards 11,500

A close above 11,350-11,400 on the Nifty 50 has opened room for the index to rally towards 11,500 levels in the short term, experts said.

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It was a volatile week for Indian markets but bulls ultimately managed to take control. But, rest assured, this week could see wild gyrations as markets will react to Exit Polls on Monday, as well as Election Poll results on Mat 23rd.

Both Sensex, and Nifty climb over 1% for the week ended May 17 but broader market underperformer. Most experts feel that if we get a favourable outcome in the poll results there could be a possibility that attention could shift to midcaps stocks.

Close

In the week gone by, the Nifty50 reclaimed 11400 levels on a closing basis while the S&P BSE Sensex had a touch and go moment with 38,000.

Most experts suggest that the move could be largely led by short-covering.

Investors’ wealth in terms of market capitalisation on the BSE rose by 1.4 lakh crore in a single session. The average market capitalisation of the BSE listed companies rose to Rs 146.59 lakh crore on May 17 compared to Rs 145.22 lakh crore recorded on Wednesday on the BSE.

According to an Exit Poll conducted by Network 18 suggest that BJP is likely to gather over 300 seats. Republic-CVoter see BJP hitting 287 while Congress gaining about 128 seats.

Experts feel that anything above 270 on May 23rd will be positive for markets. The kneejerk reaction could take the index higher by over 100 points but the gap-up is unlikely to sustain.

On the macro front, snapping its three-session winning streak, the rupee Friday declined by 20 paise to close at 70.23 against the US dollar as rising crude oil prices and recent foreign fund outflows weighed on investor sentiment.

On the institutional front, FPI were net sellers in Indian markets for 1057 crore while DIIs were net buyers to the tune of Rs 1809 crore, provisional data showed.

Overseas investors have pulled out a net amount of Rs 6,399 crore from the Indian capital markets in May so far on the back of election-related uncertainty and the US-China trade tensions. Prior to this, foreign portfolio investors (FPI) were net buyers for three consecutive months.

Big News:

As many as 86 companies will declare their results for the quarter ended March later today which include names like Astral Poly, Bharat Forge, BPCL, HEG, Jindal Stainless, Kitex Garments, Tata Motors, Torrent Pharma, United Breweries etc. among others.

Tata Motors: PAT likely to fall by over 60% YoY to Rs 1210 crore

Torrent Pharma: PAT likely to by 2.4% YoY to Rs 271 crore

BPCL: PAT likely to fall by 16% YoY to Rs 70 crore

HPCL: PAT likely to fall by 20% YoY to Rs 1383 crore

(All the estimates are from Motilal Oswal)

Technical View:

Nifty formed a bullish candle on the daily charts, and a Hammer like candle on the weekly charts

It broke above crucial resistance levels in just one trading session

A close above 11,350-11,400 on the Nifty 50 has opened room for the index to rally towards 11,500 levels in the short term, suggest experts. However, selling pressure could continue in case the index closes below 11,259.

Three levels: 11100, 11259, 11550

Max Call OI: 12000, 12500

Max Put OI: 11000, 11500

Stocks in news:

Baring Private Equity Asia (BPEA) has acquired 30.50 percent stake in mid-sized software services firm NIIT Technologies Ltd for about Rs 2,627 crore, a regulatory filing said on May 18.

Dr Reddy’s Laboratories has reported a 44 percent year-on-year jump in its Q4 FY19 net profit at Rs 434.4 crore. Revenue rose 14 percent YoY to Rs 4,016.6 crore.

Pesticides maker UPL May 17 reported a 72 percent decline in consolidated net profit at Rs 206 crore for March 2019 quarter. The company had posted a net profit of Rs 737 crore in the year-ago period, the Mumbai-based firm said in a regulatory filing.

Technical Recommendations:

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

HDFC: Buy| LTP: Rs 1993.65| Target: Rs 2040-2050| Stop Loss: Rs 1960| Upside 3%

ICICI Lombard: Buy| LTP: Rs 1120| Target: Rs 1218| Stop Loss: Rs 1064| Upside 9%

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 May 20, 2019 07:19 am
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