Moneycontrol
Last Updated : Oct 09, 2018 09:34 AM IST | Source: Moneycontrol.com

Crucial support for Nifty at 10,100; earnings, macro data will chart market direction this week

The markets are struggling mainly due to deteriorating macro environment and strength in rupee as well as softening in crude oil prices.

Moneycontrol Contributor @moneycontrolcom
 
 
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Jayant Manglik

The market plunged sharply lower and breached their crucial supports last week. The weakness in currency and a steady rise in crude oil price soured the sentiment, which further deteriorated with feeble global cues and change in the monetary policy committee (MPC's) stance.

The decline was widespread, with almost all the sectoral indices ended lower last week. The benchmark index, Nifty lost over 5 percent and settled at 10,316.45 in the end.

The week marks the beginning of earnings season with IT bellwether TCS declaring its Q2 results on October 11. Market participants will also be eyeing key macro data of IIP and CPI inflation on October 12.

The recent fall in the Nifty has engulfed gains of the last four months and still, there is no sign of recovery. Besides, broader indices are trading under tremendous pressure.

The markets are struggling mainly due to deteriorating macro environment and strength in rupee as well as softening in crude oil prices.

Also, the upcoming earnings season would pave the way forward. We reiterate our cautious view on markets and suggest keeping limited exposure. The Nifty50 has next crucial support placed around 10,100.

Here is a list of top three stocks which could give 5-7% return in the next 1 month:

IndusInd Bank | Buy | Target: Rs 1740| Stop-loss: Rs 1530| Return 7.7 %

IndusInd Bank has witnessed a decent profit taking from its record high and currently hovering around the support area of 100-EMA on the weekly chart.

Considering its chart pattern and oversold positions, we expect marginal consolidation followed by strong rebound ahead. The rise in volume also indicates buying interest. We advise traders to use this phase and accumulate in the range Rs 1,600-1615. It closed at Rs 1600 on October 8, 2018.

Bata India: Buy| Target: Rs 970| Stop-Loss: Rs 860 | Return 7.7 %

Bata India has retraced considerably from its record high in the last five weeks and tested the support zone of the long-term average (200-EMA) on Monday i.e. October 8.

The stock not only recovered from that zone but also closed around the day’s high. Technical indications are in the favor of further rebound. We advise investors to create fresh longs in the range of Rs 890-900. It closed at Rs 894 on October 8, 2018.

Bajaj Auto: Sell October Futures| Target: Rs 2470| Stop-Loss: Rs 2710| Return 5.7%

Bajaj Auto has witnessed a breakdown from the distribution pattern of late and is likely to see a gradual decline ahead. Besides, overall weakness in the auto index is adding to negativity.

We advise initiating shorts on any technical bounce within the range Rs 2620-2650. It closed at Rs 2577 on October 8, 2018.

(Disclaimer: The author is President, Religare Broking. 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 Oct 9, 2018 09:32 am
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