Q) Indian market closed on a muted note last week with slight negative bias snapping two straight weeks of gains. How is the first week of January likely to pan out for investors?
A) If we look at the recent scenario, the Nifty index made a high of 12,293 and a low of 11,800. Going forward, this range may continue for the week as well, and probably for January, unless the market breaks through on either side of the levels which will decide the direction of the market.
Q) Auto sales will be an important data point which the Street will be watching out for. Do you see a recovery in December sales?
A) In 2019, the auto industry witnessed a major sales decline due to multiple clinical and non-clinical factors. Liquidity deficit and a steep rise in prices due to regulatory changes impacted demand.
We are entering the last quarter of FY2020 and the numbers will play an important role. Though we do not expect much of recovery in December sales as various reports suggest the demand has dried out after the festive seasons, we expect a gradual recovery in the coming year.
This stock is a good bet for one month. If we look at supportive oscillator RSI has posted hidden divergence where the indicator is making new low but the price doesn’t create buying signals.The intermediate trend line support suggests bears have given up and bulls are taking control. Traders can maintain a stop loss of 140 while a target can be placed at Rs 220.
If we look at the larger time frame mainly on the weekly price chart, the stock has given a breakout on the RSI oscillator, and the intermediate trendline support took place near 700 mark.On the lower time frame, mainly on the daily chart, it is moving in an uptrend by forming a higher top, and higher bottom formation. All the indication shows that the stock will be moving towards the northern trajectory. It is a buy with a target of Rs 780, and a stop loss can be maintained below Rs 685.
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