After a robust expiry session last week, the Indian equity market continued to ride on a volatile trajectory driven by the weakening of rupee against dollar coupled with higher crude oil price dampening fiscal target.
During the week under review, the Nifty index slipped from the crucial level of 11,550 to touch a weekly low of 11,496 levels before closing a session at 11,520 levels.
The index lost about 1.86 percent on week-to-week basis dragged by Banking and Auto stocks. However, IT index ended the session on a positive trajectory with an intraday gain of 2.06 percent backed by strengthening of the dollar.
With index slipping below 5-days moving average level on Monday along with successive consolidation on Tuesday, the index formed a bearish candlestick pattern on its daily price-chart as selling pressure continued at a higher level.
The weekly RSI stood at 69 levels slipping below from the previous level indicating a negative divergence while MACD continued to trade above Signal-Line. The index is currently facing resistance from the higher band at 11,760, while support level is placed at 11,340.
As the market continues to observe macro regime with lack of major trigger in the domestic market, the movement in rupee along with momentum in crude oil price is expected to be likely impetus for equity market on either side.
As internal advance-decline ratio continues to indicate a negative setup for the domestic market, the profit-booking on the rally is expected to cap upward rally in coming sessions.
We advise to remain selective on the stock with strict stop loss and expect the Nifty index to trade at 11670 levels on upside and 11420 levels on the downside on weekly basis.
Here is a list of three stocks which could give 4-10% return in next 1 month:
Future Consumer: Buy | Target: Rs 59 | Stop-Loss: Rs 50 | Return: 10%
Despite a negative trajectory on an intraday basis, Future Consumer made a strong rebound on weekly basis to breach upward from its crucial resistance of Rs 50.40 levels after forming a lower base at Rs 44 zone.
It witnessed a reversal trend favouring upward trajectory managing outpace long-term moving average level of 100-50-days at 46 and 51 respectively, and also witnessed a significant volume growth above its daily average.
The weekly RSI level at 63 has shown a positive price divergence while MACD continued to indicate bullish crossover. We have a buy recommendation for Future Consumer which is currently trading at Rs 53.75
Wipro: Buy | Target: Rs 332 | Stop-Loss: Rs 298 | Return: 6%
After consolidating from a price band of Rs 298 toward Rs 255 levels, Wipro continued to trade in an uptrend trajectory forming a higher support level at Rs 285-274 levels.
The scrip also witnessed a crucial breakout from the long-term moving average level 200-100 days last month which was further supported by substantial volume support growth in the same period.
The momentum indicator continued to signal positive trend with weekly RSI at 67 levels, while MACD making bullish crossover during last sessions. We have a buy recommendation for Wipro which is currently trading at Rs 313.55.
IRB Infrastructure Developers: Sell | Target: Rs 165 | Stop-Loss: Rs 196 | Return: 4%
IRB Infrastructure continued to remain under extended selling pressure in last six months, consolidating from a higher band of Rs 281 levels towards fresh low of Rs 168.75 levels.
It further slipped below from all the crucial moving-average level placed at Rs 206-185 levels, and thus indicating a negative trajectory. With the formation of the lower band, it also saw a subdued volume growth in last one week.
The weekly RSI stood at 31 levels while MACD is trading below its Signal-Line, both indicating selling regime. We have a sell recommendation for IRB Infrastructure which is currently trading at Rs 172.
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