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Last Updated : Aug 08, 2019 07:24 AM IST | Source: Moneycontrol.com

A morning walk down Dalal Street | Nifty must consolidate above 10,782 to prevent further damage

Traders to maintain a tight stop below 10,783 on closing basis for long positions if any, whereas fresh positional shorting opportunity can be considered on a close below 10,783, suggest experts.

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A volatile Wednesday on D-Street! The index started off the day on a positive now but felt selling pressure at higher levels. The S&P BSE Sensex plunged nearly 300 points while the Nifty50 saw a dip of nearly 100 points.

The RBI policy stance is clearly pro-growth. The measures taken to increase flows to NBFCs are credit positive and will enhance lending, suggest experts but concerns over the health of the economy and the extent of further rate cut dented sentiment.

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The RBI’s rate cut and dovish stance indicate an unambiguous focus on growth and a high priority for boosting consumption, said, experts. The RBI has also cut real GDP growth estimates for FY20 from 7% to 6.9%.

Rate-sensitive stocks pared gains and turned negative towards the close of the trade. The S&P BSE Auto index fell 2.1 percent, followed by the S&P BSE Bankex which was down by over 1 percent. The Consumer Discretionary index was down 0.8 percent even as pharma and IT bucked the trend.

The rupee dropped 8 paise to finish at 70.89 against the US dollar on August 7 after the RBI cut the key interest rate and lowered the growth estimate for the current fiscal.

On the institutional front, FPIs were net sellers in Indian markets for Rs 383 cr while the DIIs were net buyers to the tune of Rs 531 cr, provisional data showed.

Big News:

As many as 172 stocks will declare their results for June quarter which include names like Adani Enterprises, City Union Bank, LT Foods, Engineers India, GE Shipping,  Godrej Properties, Hexaware Technologies, Mahanagar Gas, NBCC, Page Industries, Take Solutions, Tata Chemicals, Thermax, Texmaco Rail, Uco Bank, UltraTech Cements etc. among others.

UltraTech Cements: PAT likely to grow by 6% YoY

Hexaware Tech: PAT likely to fall by 1.3% YoY

Page Industries: PAT likely to fall by 15% YoY

(All estimates are from Motilal Oswal)

Technical View:

Nifty formed a bearish candle on daily charts

It faced resistance at its 5-days EMA placed at 10942 which has been acting as a stiff resistance since 8th July

Nifty needs to consolidate by defending recent corrective swing low of 10,782 to prevent further damage.

Traders to maintain a tight stop below 10,783 on closing basis for long positions if any, whereas fresh positional shorting opportunity can be considered on a close below 10,783, suggest experts.

Three levels: 10835, 10975, 11160

Max Call OI: 11000, 11500

Max Put OI: 11000, 10700

Stocks in news:

Software services company HCL Technologies has reported a 13 percent sequential decline in June quarter (Q1) profit at Rs 2,220 crore, dented by operating income, but maintained full year revenue growth guidance.

Tata Steel August 7 reported a steep 64.3 percent year-on-year (YoY) decline in June quarter profit to Rs 693 crore amid muted revenue growth and subdued operating income.

Adani Ports and Special Economic Zone (APSEZ) on August 7 reported a 47.50 percent rise in its consolidated net profit to Rs 1,028.69 crore for the June quarter, helped by higher income.

Technical Recommendations:

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

Berger Paints: Buy| LTP: Rs 347.50 | Target: Rs 370.50|Stop Loss Rs.335.50|Upside 6.60%

ITC: Sell| LTP: Rs.253.35 | Target: Rs 238|Stop Loss: Rs 263.50|Downside 6%

United Spirits: Buy| LTP: Rs.599.10| Target: Rs 641|Stop Loss: Rs 575|Upside 7%

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 Aug 8, 2019 07:20 am
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