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Last Updated : Feb 20, 2020 09:17 AM IST | Source: Moneycontrol.com

Market Headstart: Nifty may retest 12,200; experts say traders can create longs on dips

Trends on SGX Nifty indicate a positive opening in India, with a 127 points, or 1.06 percent, gain. The Nifty futures were trading around 12,146-level on the Singaporean Exchange.

The Nifty50 snapped 4-day losing streak on February 19 and is all set to retest 12,150-12,200 levels tracking positive trend seen in other Asian markets.

Trends on SGX Nifty indicate a positive opening in India, with a 127 points, or 1.06 percent, gain. The Nifty futures were trading around 12,146-level on the Singaporean Exchange.

The final tally on D-Street on February 19 – the S&P BSE Sensex rose 428 points to 41,323 while the Nifty50 closed with gains of 133 points to 12,125.

Close

Sectorally, action was seen in energy, healthcare, oil & gas, FMCG, consumer durables and power indices.

Broader markets outperformed frontliners as the S&P BSE Midcap index rose 1.3 percent and the S&P BSE Smallcap index gained 1.4 percent.

The government on Wednesday approved a Rs 4,558-crore scheme to promote the dairy sector which will benefit about 95 lakh farmers. The Cabinet has also decided to raise the benefit under the interest subvention scheme from 2 percent to 2.5 percent. Both the decisions are aimed at benefitting the farming community.

Dairy-related stocks such as Hatsun Agro, Prabhat Dairy, Vadilal, Parag Milk Food etc. will be in focus.

Gold prices extended gains for the sixth consecutive day to touch a lifetime high of Rs 41,636 per 10 grams in Mumbai's bullion market.

On the institutional front, FPIs were net sellers in Indian markets for Rs 190 cr while the DIIs were net buyers to the tune of Rs 590 crore, provisional data showed.

Big News:

The coronavirus outbreak will have a limited impact on India but the global GDP and trade will definitely get affected due to the large size of the Chinese economy, RBI Governor Shaktikanta Das has said.

Only a couple of sectors in India are likely to see some disruptions but alternatives are being explored to overcome those issues, he said.

The deadly virus has brought a large part of the world's second-largest economy China to a standstill and its impact has been felt across industries.

India's pharmaceutical and electronic manufacturing sectors are dependent on China for inputs and they may be impacted, Das told PTI in an interview here.

Technical View:

Nifty formed a bullish candle on the daily charts.

It made a strong comeback with an Island Reversal reversal formation.

As long as Nifty sustains above Wednesday's gap zone of 12,042–12,030 levels, one can retain an optimistic stance, suggested experts.

Nifty is trading below its 50-Day Exponential Moving Average placed at 12,140.

Traders can make use of dip to create fresh longs with a stop below 12,030 levels on a closing basis and look for an initial target of 12,178.

In case Nifty closes below 12,030 levels, it shall be considered as a weak sign which should ideally resume the downswing, experts said.

Three levels: 12030, 12134, 12178-12200

Max Call OI: 12300, 12500

Max Put OI: 12000, 11800

Stocks in the news

Kotak Mahindra Bank: The lender said the Reserve Bank has granted its final approval for reducing promoters' stake in the bank to 26 percent.

The Adani Group is in talks with promoters of Simplex InfrastructuresNSE 4.47 % to take equity exposure in the latter through a fresh share sale.

Vodafone Idea: Brickwork Ratings downgraded company’s NCDs worth Rs 2,500 crore to BWR BBB- from BWR BB-.

Technical Recommendations:

We spoke to Sanctum Wealth Management and here’s what they have to recommend:

Jubilant FoodWorks: Buy| LTP: Rs 1897| Stop Loss: Rs 1830| Target: Rs 2,125| Upside 12%

Westlife Development: Buy| LTP: Rs 486| Stop Loss: Rs 460| Target: Rs 570| Upside 17%

Voltas : Buy| LTP: Rs 733| Stop Loss: Rs 700| Target: Rs 840| Upside 14%

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their 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 Feb 20, 2020 08:36 am
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