Mr. Mustafa Nadeem, CEO, Epic Research.
Nifty ends the week making a "Hammer" type candlestick on weekly chart while ended the previous expiry on a negative note and kicked off the July series with a rebound leaving choppiness on the table for directional traders. A week that has been gripped by fears of Trade war amongst Asian economies, Rising crude oil prices and USD INR depreciation. It was a choppy week as bears dominated for the most of the part due to expiry.
The June expiry was on a weak note as rollover statistics pointed to a lower average of rollover for Nifty which was at 64% while the 6-month average has been around 67. Bank Nifty maintained the momentum with a rollover above 71% almost near to its 6 month average of 73%. Energy, Financials, Auto, IT has been the flavour of the street for both bulls and bears but looking at recent data we expect them to remain muted while sectors like Metals, real estate and fertilizers to perform well in July series while Oil & Gas, Infrastructure, FMCG may see some pressure on higher side.
Since Volatility has been higher we have seen Put side weight on long position but a recent correction in volatility along with renewed buying in broader indices for July series points to a positive start. The aggressiveness of FII FPI which was net outflow has reduced and seen some substantial decline. The July series which started on a positive note with broader indices gaining more than 1 % to 2%, we have seen higher activities at strikes of 10800 - 10900 while on downside highest activity is observed at 10500 10400. We expect this to be initial range and will further develop as we move ahead with days.
Fundamentals that will affect Equity market will be domestic data like IIP, WPI and USD INR. As USD INR continues to depreciate we expect it to put some pressure on RBI in its August meet while trade war may emerge from time to time to haunt the street participants.
IDBI - Stock has formed morning star on the daily chart with huge volume breakout and closed near to days high. We recommend buying above 56 for the target of 60 with the stop loss of 52.80.
JINDALSTEL - Stock has outperformed well with above the average volume. It took the support of 200 EMA & DMA on the daily chart and also formed morning star on the daily chart. We recommend buying from current level for the target of 233 with the stop loss of 216.
JETAIRWAYS - Stock has performed well with good volumes on the daily chart. The RSI also has shown a good reversal from an oversold position on daily chart. We recommend buying above 350 for the target of 360 with the stop loss of 343.