All eyes will be on IT majors such as TCS and Infosys which will report their numbers on October 10 and October 11 respectively.
The market plunged sharply and ended around the week’s low last week, pressurised by feeble local cues and not so encouraging global markets.
The sentiment was downbeat from the beginning due to weak macroeconomic data and the situation only worsened as fresh concerns over the asset quality in banking and financial space triggered a sharp selling across the board.
In the end, RBI’s lower growth projection rattled the markets despite the rate cut of 25 bps. The Nifty settled at 11,174.75; down by 2.93 percent for the week ended October 4.
All eyes will be on IT majors such as TCS and Infosys which will report their numbers on October 10 & 11 respectively. Besides, participants will be closely eyeing the Index of Industrial Production (IIP) data which is scheduled on October 11.
On the global front, the trade negotiations meeting between the US and China are likely to resume from October 10.
The decline in the benchmark has turned the participants cautious again as the majority were hoping the recent surge to extend further.
Though the selling pressure was visible across the board, it was banking which led the fall. And, it’s certainly not an encouraging sign before the beginning of the earnings season.
We may see further decline ahead and Nifty could find support around 11,050-10,800 levels. In the case of a rebound, 11,250-11,400 zone would act as a hurdle.
Considering the present scenario, we advise focusing more on stock selection and trade management. Investors, on the other hand, should keep a close watch on the earnings and balance their portfolios accordingly.
Here is a list of top three stocks which could give 7-9% return in the next 3-4 weeks:
Britannia Industries Ltd: Buy | Target: Rs 3,150 | Stop-Loss: Rs 2,820 | Upside 7.1 percent
Britannia Industries Ltd witnessed marginal profit-taking of late and retested the support zone around Rs 2,850 levels.
On Oct 07, it surged supported with a noticeable rise in the volume activity and that resultant formation of a fresh buying pivot.
We advise initiating fresh longs in the mentioned levels of Rs 2,930-2,940.
ITC Ltd: Sell Oct Futures | Target: Rs 240 | Stop-Loss: Rs 260 | Downside 5.1 percent
Bank of Baroda: Sell Oct Futures | Target: Rs 80 | Stop-Loss: Rs 93 | Downside 9.1 percent
In line with other PSU banking counters, Bank of Baroda has been maintaining a downtrend for long and still there’s no sign of reversal yet.
In fact, it has recently posted a fresh breakdown from its month-long consolidation phase and likely to test the monthly support zone around 80 levels. We advise using any technical bounce to initiate shorts in the given range of 88-91.
(The author is Vice President, Research, Religare Broking Ltd)
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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