Romesh Tiwari
A negative trend for the Nifty continued from July 12, and Nifty slided to make a low of 11,461 on July 9, still trading not faraway from it. A feeble attempt to cross 11,600 saw supply coming in.
For the next week, markets are likely to trade negatively given the concerns arising of budget declarations about raising public holdings and tax surcharges.
Technically, now, the Benchmark Nifty50 is forming a bearish flag pattern on the daily chart, and the index is still sustaining below the 20 & 50-day moving average on daily chart. These moving averages are heading to converge downward on the same chart and RSI, which is looking weak at 41.07 levels. On the breakout of this pattern, a downward movement could be witnessed in the index.
On the sectoral front, results from finance and banking sector, like State Bank of India (SBI), Axis Bank, LIC Housing Finance and Kotak Mahindra Bank, will be declared and hopefully bring some clarity about the prospects of next quarters.
Falling bond yields will result in treasury gains for banks. Also, improving asset quality will help the fundamentals for next quarter. We are positive on SBI, PNB, HDFC Bank, Yes Bank in near to medium term.
The steel stocks and FMCG sector could show a bearish movement whereas the pharma stocks and cement sectors could show an uptrend.
In the coming week, there would be a data of WPI Inflation (YoY) (June) on July 15. On the international front, there would be data on Core Retail Sales, Retail Sales and Fed Chair Powell Speaks on July 16, FOMC Member Evans Speaks on July 17, Philly Fed Manufacturing Index and Unemployment Claims on July 18.
Here are the top stock trading ideas which can give good returns:
UltraTech Cement: Buy above Rs 4,620 | Target: Rs 4,795 | Stop loss: Rs 4,445
UltraTech Cement did not sustain below the levels of Rs 4,400 and moved upward from there. It is now sustaining above 20 & 50-day moving averages on daily chart. MACD on the daily chart has converged upward, and RSI is recovering from lower levels, now placed at 51.87 levels on the same chart.
Apollo Hospitals: Buy above Rs 1,370 | Target: Rs 1,425 | Stop loss: Rs 1,315
The stock tested the support of 50-day moving average around Rs 1,290 levels and showed a sharp rise from there to close above 20-day moving average on daily chart. MACD is now heading to converge upward on the daily chart and RSI showing a buy signal on the same chart, now placed at 58.76 levels.
LIC Housing Finance (Future): Sell below Rs 532 | Target: Rs 510 | Stop loss: Rs 554
LIC Housing (Fut) has formed a pattern similar to "three dark crows" pattern on the daily chart. It is sustaining below 20 & 50-day moving averages on the same chart and closed on a negative note below these moving averages for the week. MACD is showing a downward crossover and RSI is showing sell signal on daily chart which is now placed at 44.07 levels.
The author is Head of Research at CapitalAim
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