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Last Updated : Jan 07, 2020 10:32 AM IST | Source: Moneycontrol.com

'Short IndusInd Bank & IOC January futures'

Indications are pointing towards further slide in the Nifty and expect 11,800 to act as a cushion. We advise maintaining “Sell on rise” in the index.

Moneycontrol Contributor @moneycontrolcom
 
 
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Ajit Mishra

The market started the calendar 2020 on a subdued note but the move was largely along expected lines.

The benchmark indices extended the consolidation bias and hovered in a range while the recent buoyancy in the broader markets kept the participants busy.

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However, the news of geopolitical tension between the US-Iran on the last trading day turned the sentiment negative. Amid all, the Nifty managed to settle almost on the flat note at 12,226.65.

We expect the volatility to remain high this week as it marks the beginning of the earnings season and among the big names, IT major, Infosys will announce its numbers on Friday i.e. January 10.

On the macroeconomic front, participants will be eyeing Markit Services PMI and IIP data on January 6 and January 10 respectively.

Needless to say, the cues from the global front would also remain on the traders’ radar, after the fresh escalation between the US-Iran.

Indications are pointing towards further slide in the Nifty and expect 11,800 to act as a cushion. We advise maintaining “Sell on rise” in the index.

Stocks, on the other hand, may continue to witness movement on both sides; thanks to the upcoming earnings season and recent buoyancy in the broader markets thus traders should plan their positions accordingly.

Here is a list of top three stocks that could give 4-7 percent return in the next 3-4 weeks:

Wipro Ltd: Buy | Target: Rs 260 | Stop-Loss: Rs 245 | Upside: 4 percent

Wipro has been witnessing a rebound for the last one month, after retesting the support zone around Rs 235 levels. It has reached close to its critical hurdle of 200-Days EMA on the daily chart and the recent buoyancy in the IT space is indicating a strong possibility of a breakout in the near future.

The chart formation is further adding to the confirmation. We thus advise creating fresh longs in the range of Rs 248-250. It closed at 252.15 on Jan 6, 2020.

Indian Oil Corporation Ltd: Sell January Futures | Target: Rs 115 | Stop-Loss: Rs 129 | Downside: 7.8 percent

All the OMCs are trading under tremendous pressure and IOC is no different. After the sharp plunge, it was hovering in a range and witnessed a fresh breakdown on January 6. All indications are in the favour of gradual decline ahead.

Traders can create fresh shorts in a given range of 124-126. It closed at 122.85 on Jan 6, 2020.

IndusInd Bank Ltd: Sell January Futures | Target: Rs 1,380| Stop Loss: Rs 1,540| Downside: 7.1 percent

In line with the decline in the benchmark index, the banking pack is too seeing the sharp reaction on the downside and in fact, it’s underperforming the benchmark.

Among the counters, IndusInd Bank is currently hovering in a range while holding above the support zone of the long term averages but the chart pattern is indicating the possibility of a fresh decline.

We advise initiating fresh shorts within the range of 1,485-1,495. It closed at 1,478 on Jan 6, 2020.

(The author is VP Research, Religare Broking)

Disclaimer: The views and investment tips expressed by investment 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.

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First Published on Jan 7, 2020 10:32 am
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