Rajesh Agarwal
Benchmark indices managed to close in the positive zone for the eighth straight session on Monday on positive economic data that revived overall investors’ sentiment despite mixed global cues. Shares of India’s second-largest IT services company, Infosys, tumbled nearly three percent after the management forecast FY19 operating margin between 22 percent and 24 percent. Credit Suisse said this was 100 basis points below expectations and slightly lower than its previous year’s 24.3 percent.
Meanwhile, in economic data, March wholesale price inflation (WPI) came in at 2.47 percent on Monday versus 2.48 percent month-on month.
Broader weakness in Asian markets also weighed on sentiment amid tensions between the United States and Russia over Syria.
Technical Outlook
Nifty
The Nifty opened with a gap down around its 50 EMA and rebounded from Monday's low to close higher at 10,528.35, up 0.46 percent. The index has formed a 'Bullish Engulfing' candlestick pattern. This candle indicates the change in sentiment from a bearish gap down in the morning, to a large bullish real body candle that closes at the highs of the day. It is likely to retest 10,650-10,670 levels on the upside: Inner Trendline which might work as an immediate hurdle zone.
Bank Nifty
Nifty Bank is consolidating within its two major moving averages of 200 and 100 SMA for five consecutive days. It has formed a 'Bullish Candle' after multiple bearish reversal candles, thereby negating a bearish set up. Now the Nifty Bank has to cross 25,420 decisively for a further upmove.
If the index fails to cross this level and sustains below it, Nifty Bank may correct till 24,700. On the hourly scale, the index is trading around overbought zone with a negative divergence on RSI.
Below are the top five stocks which can deliver up to 7% return in the near term: Indiabulls Ventures | Rating: Buy | Target: Rs 398 | Stop loss: Rs 365 | Return: 5%
Tata Global Beverages | Rating: Buy | Target: Rs 293 | Stop loss: Rs 271 | Return: 5%
Bombay Dyeing | Rating: Buy | Target: Rs 270 | Stop loss: Rs 252 | Return: 4%
Jai Corp | Rating: Buy | Target: Rs 173 | Stop loss: Rs 155 | Return: 7%
Sun Pharmaceutical Industries | Rating: Buy | Target: Rs 534 | Stop loss: Rs 510 | Return: 3%
Disclaimer: The author is the Head of Research at AUM Capital Markets. 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.
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