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Last Updated : Sep 27, 2019 10:55 AM IST | Source: Moneycontrol.com

A morning walk down Dalal Street | Nifty may rally further if it tops 11,695; follow 'buy on dips' approach

Foreign institutional investors (FIIs) bought shares worth Rs 737.17 crore, while domestic institutional investors (DIIs) also bought shares of worth Rs 339.28 crore in the Indian equity market on September 26.

 
 
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Positive global cues, rupee's rise against the dollar and a drop in global crude oil prices pushed equity benchmarks Sensex and Nifty over a percent higher on September 26.

Investor sentiment got a fillip after positive comments from China on a trade deal with the United States. As per Reuters, the Chinese commerce ministry said Beijing is in close communication with Washington and is preparing to make progress at trade talks in October.

Close

Nifty ended September series with a gain of nearly 6 percent, forming a bullish candle after forming red candles in the last three consecutive expiries, which indicates that bulls are trying to take charge from the lower end.

The index logged a gain of 131 points, or 1.15 percent, settling at 11,571.20, with 41 stocks up and 9 down.

The Sensex index closed 396 points, or 1.03 percent, higher at 38,989.74, with 23 stocks in the green and 7 in the red.

The overall market capitalisation of BSE-listed firms jumped to Rs 1,48,45,854.70 crore from Rs 1,46,88,763.39 crore on September 25, making investors richer by Rs 1.57 lakh crore in a single day.

Analysts are positive on the market and suggest to use the dips to make fresh bets.

"We reiterate our bullish view on the Nifty and advice continuing with 'buy on dips' approach. Nifty has the potential to test 11,700-11,800 in the near future, so any intermediate dip should be considered as a buying opportunity. We still see limited participation so suggest caution while choosing stocks," said Ajit Mishra, Vice President- Research at Religare Broking.

On the institutional front, foreign institutional investors (FIIs) bought shares worth Rs 737.17 crore, while domestic institutional investors (DIIs) also bought shares of worth Rs 339.28 crore in the Indian equity market on September 26, as per provisional data available on the NSE.

The Indian currency also moved higher on September 26 due to some selling in greenback by banks and exporters. The rupee closed 16 paise up at 70.88 per dollar.

Big News: Government to bring guidelines to make IBC resolution consistent

The Ministry of Corporate Affairs (MCA) will soon release a detailed set of guidelines to shield winning bidders in Insolvency and Bankruptcy Code (IBC) cases against reinstated claims on acquired assets, reported Business Standard.

Companies such as JSW Steel and Tata Steel had brought the issue to the government's notice after the closure of the IBC process for Bhushan Power & Steel.

JSW sought relief against an order by the National Company Law Tribunal (NCLT) for the Bhushan Steel resolution plan. Tata Steel which acquired Bhushan Steel faced claims from different authorities.

Resolution under IBC usually means excessive delays and major haircuts in claims for most of the entities. Many cases are also stuck in endless or subsequent litigation.

Technical view:

Nifty recouped most of the previous day's losses and closed above 11,550 level, forming bullish candle on daily charts, indicating a positive trend for the coming session.

Experts feel the momentum may remain positive and if the index breaks 11,695, the crucial resistance levels, then it may move towards its earlier record high.

Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in said it appears that at the recent high of 11,695 levels Nifty encountered selling pressure after hitting a resistance point of a downsloping trend line which is in progress from the June highs of 12,103 levels.

Hence, this index needs to breakout above the resistance point of the said trend line, which is placed around 11,692 to confirm its strength once again, he added.

Three levels of Nifty:

Intraday low- 11,466.35 | Intraday high- 11,610.85 | 200-DMA- 11,244.

Max Call OI: 11,600, 11,700

Max Put OI: 11,500, 11,400

Stocks in news:

DHFL: Sources told CNBC TV18 that the company has presented a proposal which involves lenders taking over 60 percent stake in the company.

ITI: The public sector undertaking launched its cloud services and solutions platform for central and state government entities, banks, public sector undertakings, small and medium enterprises and startups in India.

Ruchira Papers: The company has declared a dividend of Rs 2.25 per share for FY19.

Unitech: The company has got a show-cause notice from Noida Authority.

Stocks that move out of F&O from September 27: Arvind, Birlasoft, Engineers India, Hindustan Zinc, IDBI Bank, Kajaria Ceramics, MCX India, Oracle Financial and Raymond.

Technical Recommendations:

We spoke to Mehul Kothari, Senior Technical Analyst at IndiaNivesh Securities and here’s what he has to recommend:

Voltas: Buy | LTP: Rs 680 | Target price: Rs 755 | Stop loss: Rs 620 | Upside: 11.4%

Concor: Buy | LTP: Rs 615.50 | Target price: Rs 715 | Stop loss: Rs 560 | Upside: 15.5%

HDFC: Buy | LTP: Rs 2,065.90 | Target price: Rs 2,220 | Stop loss: Rs 1,960 | Upside: 7.6%

(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 27, 2019 07:24 am
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