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Last Updated : Mar 18, 2019 02:48 PM IST | Source: Moneycontrol.com

A morning walk down Dalal Street | Slip below crucial level of 11,383 will attract further selling pressure

Considering breather after a three-day rally indicates that there could be some more consolidation in the coming session, but the major downside is unlikely, experts said, adding 11,383 is crucial level for bulls.

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A day of consolidation for Indian markets but no love lost for the bulls as benchmark indices closed above crucial support levels. The Nifty50 registered a higher intraday low of 11,314 which now becomes a crucial support level for Friday’s trading session.

The index has already rallied by over 500 points so far in March and some breather or consolidation cannot be ruled out at least in the near term but the larger trend still remains to be on the upside.

Both Sensex and Nifty closed off day’s high but still managed to close in green compared to their respective previous day’s closing level. The NiftyBank hit yet another record high.

The final tally on D-Street – the S&P BSE Sensex closed 2.7 points higher at 37,754 while the Nifty50 gained 1.55 points to end at 11,343 on Thursday.

The NiftyBank hit a record high of 29,070 before closing the day at 28,923, up 38 points, led by gains in IndusInd Bank, Yes Bank, RBL Bank, IDFC Bank, and Bank of Baroda.

Some experts feel that with breakout confirmed, NiftyBank has the potential to rally by another 2500 points in the coming months.

The broader strategy for investors is to try and buy on declines with strict stop losses given the fact we are trading close to crucial resistance levels 11400-11420.

Macro data which has come out recently suggests that RBI could well cut rates in the upcoming policy meeting in April which is supporting rally in rate sensitive, and markets in general.

A big worry for Indian markets which could pose as a headwind is crude oil price which is at a 4-month high, on a multitude of factors.

On the institutional front, FPIs were net buyers in Indian markets for Rs 1482 crore while DIIs were net sellers to the tune of Rs 817 crore, provisional data showed.

Big News:

India’s wholesale inflation rate inched up to 2.93 percent in February, compared to 2.6 percent in January, driven by costlier vegetables that had seen prices drop sharply over the last few months as a bumper seasonal harvest flooded the mandis.

Earlier in the week, India's retail inflation, CPI, stood at 2.57 percent in February, marginally higher than the previous month’s 2.05 percent, and sharply lower than 4.4 percent in the same month last year, primarily aided by low food prices.

Like CPI, the trajectory of even wholesale inflation reversed in the month of February 2019 and came in at 2.93%, higher than the previous month. With overall inflation still in the comfort zone and GDP growth momentum waning, Ind-Ra believes RBI may go for a rate cut in its first bi-monthly monetary policy statement of 2019-20.

Technical View:

Nifty forms a bearish candle after 3 bullish candles on daily charts

Considering breather after a three-day rally indicates that there could be some more consolidation in the coming session, but the major downside is unlikely, experts said, adding 11,383 is crucial level for bulls.

In the next session if Nifty slips below 11,313 then it shall attract further selling pressure for the day which may then hint at a short term top around March 14 high of 11,383. In such a scenario initial target shall be in the zone of 11,227–11,180, suggest experts

Three levels: 11313, 11383, 11400

Max Call OI: 11500, 11400

Max Put OI: 11000, 11200

Stocks in news:

Vedanta Zinc International, a unit of diversified miner Vedanta Resources, said on March 14 it would close its Skorpion Zinc Refinery in Namibia for five weeks after a strike by its mining contractor depleted stocks.

PNB & BOI: Top lenders involved in Essar Steel debt resolution on March 14 said the final decision and recoveries from the account are likely by the end of the month. According to reports, PNB expects to recover about Rs 2,500 crore from Essar Steel.

State-run NTPC on Thursday said it has teamed up with the Indian Railways for fly ash transportation, a move that will help enhance ash utilisation at Rihand and Vindhyachal Super Thermal Power plants.

Technical Recommendations:

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

Reliance Capital March Futs: Sell| Target: Rs 158.5| Stop Loss: Rs 172| Downside 5%

Karnataka Bank: Buy| Target: Rs 140| Stop Loss: Rs 122| Upside 9.3%

DLF: Buy| Target: Rs 218| Stop Loss: Rs 194| Upside 8%

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 Mar 15, 2019 07:13 am
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