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Market Headstart: Nifty likely to inch higher towards 11,900; Westlife, Hikal top buys

Trends on SGX Nifty indicate a positive opening for the index in India, with a 73 points, or 0.62 percent, gain. The Nifty futures were trading around 11,894-level on the Singaporean Exchange.
Feb 25, 2020 / 08:26 AM IST

Indian market is likely to bounce back on February 25, but rising fears of Coronavirus spreading to other countries could cap the upside.

Both US and European equities suffered their steepest falls since mid-2016, while demand concerns savaged prices for oil and a whole swathe of industrial commodities, said a Reuters report.

Trends on SGX Nifty indicate a positive opening for the index in India, with a 73 points, or 0.62 percent, gain. The Nifty futures were trading around 11,894-level on the Singaporean Exchange.

On the domestic front, experts feel that the volatility is likely to continue ahead of Feb F&O expiry, GDP data for December quarter and weakness in the rupee.

The rupee on Monday fell by 34 paise to close at more than the three-month low of 71.98 (provisional) against the US dollar, tracking heavy selling in domestic equities and strengthening of the American currency in the overseas market.

On the institutional front, FPIs were net sellers in Indian markets for Rs 1160 cr while the DIIs were net buyers to the tune of Rs 516 cr, provisional data showed.

Technical View:

The Nifty50 formed a bearish candle and slipped below its 5-Days EMA, and 100-DMA on daily charts

Nifty closed below its 100-Days EMA placed at 11938 but also registered a breakdown below the neckline of its Head & Shoulders formation, formed on a daily line chart

In the next trading session if Nifty fails to hold the psychological support placed around 11800 levels then this corrective shall initially get extended into the bullish gap zone of 11783 – 749 levels registered on 4 th day of February, suggest experts.

For time being upsides shall remain capped around 12000 levels and hence traders are advised to remain neutral even on the short side as Nifty approached near to its support

Three levels: 11813-11800, 12012, 12200

Max Call OI: 12000, 12200

Max Put OI: 11800, 11700

Stocks in the news:

Aditya Birla Capital on Monday said it has received a foreign investment of Rs 1,000 crore from Jomei Investments in lieu of preferential allotment of shares.

Chennai-based TVS Motor Company on Monday said the coronavirus outbreak has impacted the supply of certain components thereby affecting about 10 percent of its planned production for February.

The board of Hindustan Unilever (HUL) on February 24 gave its nod to the formation of a new subsidiary that will be 100 percent owned by the company.

Technical Recommendations:

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

Westlife Development: Buy| LTP: Rs 484| Target: Rs 540| Stop-Loss: Rs 450| Upside 12%

Hikal: Buy| LTP: Rs 131| Target: Rs 145| Stop-Loss: Rs 124| Upside 11%

Bajaj Auto: Sell| LTP: Rs 2,980| Target: Rs 2,730| Stop-Loss: Rs 3,150 | Downside 8%

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Kshitij Anand is the Editor Markets at Moneycontrol.
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