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Last Updated : Oct 16, 2019 07:21 AM IST | Source: Moneycontrol.com

Early on D-Street | Nifty may surpass 11,550 as long as index stays above 11,333

A close above 11420 has opened room for the index to retest 11500 levels in the near term, suggest experts. But, any major move is expected only a close above 11700 levels.

 
 
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A close above 11400 levels gives bulls the chance to head towards 11,500-11,550 levels which have acted as crucial resistance levels for the index, and a swing high made on October 1 (11,554).

The final tally on D-Street -- the S&P BSE Sensex rose 291 points to 38,506 while the Nifty50 closed 87 points higher at 11,428 on Tuesday.

Close

So, what led to the optimism – positive commentary from the trade war front boosted sentiment. Apart from positive global cues and ease in crude oil prices, outperformance in domestic auto stocks in expectation of festival demand further lifted the sentiment.

On the institutional front, FIIs have turned net buyers in the last two days given stability in the global market which is a positive sign and is adding to the optimism.

FPIs were net buyers to the tune of nearly Rs 900 cr on Monday, and over Rs 700 cr on Friday, provisional data showed.

The International Monetary Fund (IMF) has reduced India's growth forecast for FY20 by 90 basis points to 6.1 percent, down from the 7 percent estimate in July.

Stocks and sectors which are in focus:

Sectorally, the S&P BSE Auto index rallied more than 2%, followed by Metal index which was up 1.5%, and Bankex gained 1.3%.

The S&P BSE Telecom index was down 2.1%, followed by IT index which fell 0.6%.

Top Nifty gainers – Zee Entertainment, Vedanta, and Eicher Motors

Top Nifty Losers – Infosys, Bharti Airtel, and Indiabulls Housing Finance

The rupee on Tuesday dived 31 paise to end at a nearly one-month low against the US currency due to heavy dollar buying amid fresh concerns over the progress of China-US trade talks.

On the institutional front, FPIs were net buyers in Indian markets for Rs 436 cr while the DIIs were also net buyers to the tune of Rs 929 cr, provisional data showed.

Big News:

As many as 12 stocks will declare their results for the quarter ended September which include names like Aditya Birla Money, DB Corp, Federal Bank, MindTree, and Hathway Cable & Datacom Ltd.

Federal Bank: PAT likely to grow by 66% YoY

MindTree: PAT likely to fall by 13% YoY

(All estimates are from Motilal Oswal)

Technical View:

Nifty formed a bullish candle on the daily charts

It took support near its 5-days EMA, and breached 100-DMA which acted as a crucial resistance level for the index in October. It also closed above Monday’s high of 11420 – a positive sign.

A close above 11420 has opened room for the index to retest 11500 levels in the near term, suggest experts. But, any major move is expected only a close above 11700 levels.

As long as Nifty trades above 11342-11333, the chances of Nifty surpassing 11550 remains intact. Support are seen at 11342, 11275 (200-DMA), and 11227 (200-Days EMA).

MACD is on the verge of giving a bullish crossover on the daily charts

Three levels: 11342, 11462, 11554

Max Call OI: 12000, 11500

Max Put OI: 11000, 11200

The fear indicator -- India VIX moved down by 3.33% at 16.85 levels.

Stocks in news:

Karnataka Bank reported a 5.3 percent fall in net profit at Rs 105.91 crore for the second quarter ended September of the current fiscal as bad loans increased marginally.

Software services provider Wipro reported a 7 percent sequential growth in second-quarter profit at Rs 2,552.7 crore while the guidance for Q3 was ahead of analyst estimates.

Cement major ACC on October 15 reported 44.7 percent jump for the third quarter with consolidated net profit at Rs 302.6 crore.

Technical Recommendations:

We spoke to SMC Global Securities and here’s what they have to recommend:

Kotak Mahindra Bank Ltd: Buy| LTP: Rs 1614.80| Target: Rs 1729| Stop Loss: Rs 1520| Upside 7%

Jubilant Foodworks Ltd: Buy| LTP: Rs 1316.85| Target: Rs 1490| Stop Loss: Rs 1260| Upside 13%

Adani Enterprises Ltd: Buy| LTP: Rs 155.05| Target: Rs 164| Stop Loss: Rs 135| Upside 5%

Disclaimer: The views and investment tips expressed by investment experts 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 Oct 16, 2019 07:21 am
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