Moneycontrol
Last Updated : Jul 12, 2018 07:04 AM IST | Source: Moneycontrol.com

Podcast | A morning walk down Dalal Street: Nifty likely to find support at 10,860-10,876 on any minor dip

If Wednesday's high of 10,976 gets taken out in the next few sessions, bulls will be able to push the benchmark index towards the weekly upper Bollinger Band, which is near 11,100. On the flip side, any minor degree dip is likely to find support near the recent gap area of 10,876-10,860.

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You might call it a breather after a strong rally seen in the previous trading session but analysts’ feel it was a strong day for Indian markets even though the index pared gains and closed marginally in the green.

The S&P BSE Sensex closed 26 points higher while the Nifty50 closed 1.05 points up amid trade war fears. Asian markets closed in red after the United States threatened to impose tariffs on an additional USD 200 billion worth of Chinese goods, dampening hopes of a compromise on trade.

Investors across the globe fear that an escalating US-China trade war could hit global growth and spoil investment sentiment.

If Wednesday's high of 10,976 gets taken out in the next few sessions, bulls will be able to push the benchmark index towards the weekly upper Bollinger Band, which is near 11,100.

On the flip side, any minor degree dip is likely to find support near the recent gap area of 10,876-10,860.

The market took a breather after three-day of gains. Investors looked cautious ahead of June CPI inflation and May industrial output data due on Thursday.

On the institutional front, FPI bought Rs 636 crore in the Indian equity markets and DIIs bought Rs 15 crore, according to provisional data.

The rupee ended at 68.77 a dollar, up 0.04% from its previous close of 68.82.

Big News:

The big news is trade wars and rising concerns that it will impact growth and investment sentiment across the world.

The US-China trade war is escalating further and traumatizing the equity markets worldwide.

A new round of tariffs and verbal exchange between the head of states has sent global equity markets a negative signal.

Fresh reports indicate that China has accused the United States of bullying and warned it would hit back after the Trump administration raised the stakes in their trade dispute, threatening 10 percent tariffs on USD 200 billion of Chinese goods, said a Reuters report.

China’s commerce ministry said on Wednesday it was “shocked” and would complain to the World Trade Organisation, but did not immediately say how it would retaliate. In a statement, it called the US actions “completely unacceptable”, the report added.

The USD 200 billion far exceeds the total value of goods China imports from the United States, which means Beijing may need to think of creative ways to respond to such US measures.

Technical Outlook:

The 50-share NSE Nifty index formed an indecisive pattern known as 'Doji' on the daily candlestick charts, which also resembles 'Spinning Top’ kind of pattern.

Option band signifies an immediate trading range in between 10,880 to 11,000 zones, experts said.

Bank Nifty failed to surpass previous day’s high and remained under pressure for the most part of the trading session. It formed a Bearish candle

It has to continue to hold above 26,750 zones to extend its move towards 27,100 zones while on the downside support is seen at 26,600 zones.

Three levels: 10876, 10976, 11000

Max Call OI: 11000, 10800

Max Put OI: 10600, 10700

Technical Recommendations:

We spoke to Bonanza portfolio and here’s what they have to recommend:

Divi’s Lab: BUY| CMP: Rs. 1122.20 | Target Rs.1234 |Stop loss Rs.1064 | Return: 10%

ITD Cementation: BUY | CMP: Rs. 135 | Target Rs 150 | Stop loss Rs 128 | Return: 11%

Cox & Kings: BUY | CMP: Rs. 216.55 | Target: Rs 243 | Stop loss Rs 204 | Return: 12%

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.
First Published on Jul 12, 2018 07:04 am
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