Mr. Mustafa Nadeem, CEO, Epic Research
A Fresh new all-time in benchmark indices with Nifty hitting 10283 while Sensex breached 37K mark to hit 37368.62. Backed by buying in broader indices, positive global cues, and strong rollover numbers indices managed to close near the day's high. Heavyweights lead the rally again while sectorial indices with higher weight like Pvt. banks, Energy, FMCG, and Metals were shining 1% - 2.5%.
Technically, The week started off on a positive note with Nifty coming out of a consolidation it was in on the back of escalating Trade war and concerns over Iran - US relations. Bulls managed to hold the lower range of the Flag and opened the week on a positive note. The decisive break out came on Monday as Nifty broke the upper range of Flag and ended up. This breakout has given a technical target for the upside towards 11500 - 11450. The volume in the market was comparatively higher than what it has been on the last couple of days. The lagging indices such as BankNifty broke its range to test a new all-time high of 27661.05.
F&O expiry which was seeing mild rollover statistics since February has seen upbeat rollover numbers with Nifty rollovers at 73% vs its 6 month average of 66% while Nifty bank rollover climbed to 77.5% vs 73.5% 6-month average. August series has started on a positive note and since the breakout has been imminent with the base of support shifting higher we expect the upside to continue in momentum.
The derivative data band for Nifty to expand on the upside with Strikes at 11100 - 11200 to act as support for this uptrend while long build up is seen in 11300 - 11400 strikes.
In the coming month, we expect the leading sector to be Alcohol and breweries, Textiles, Pvt. Banks, Energy as these stocks have become active given the structure of price action. The strategy remains to be stock specific with the focus on stocks amongst heavyweights that are seeing positive momentum like ITC, SBI, Gail and so on.
On the fundamentals side, For market. The quarterly numbers will continue to affect stocks and sectors while all eyes will be on RBI meet scheduled next week to decide on its policy rates which have been a key event for the market. Given the fact, that Inflation has seen a push and inching high above 5% level which has been at a comfortable level. While its projections for coming quarters and outlook will be heard crucially.
Global cues will come to haunt at times as escalating trade war between US-China has already dampened the Rupee which is seeing its depreciation on a continuous basis as it is sustaining the 69 mark. The recent verbatim between Iran US has also put concerns on sentiments given its the biggest supplier of Crude for India, presently.
We maintain the Buy on dips strategy for near-term given the momentum is strongly in favor for bulls with price target towards 10450 - 10500. The support seems to be established at recent consolidation of 10120 - 10150.
MCX - Stock outperformed in past two trading session but today it was weak. The stock has a strong resistance of 200 SMA & EMA on the daily chart and it also closed in red with low volume. We recommend selling from the current level for the target of 800 with the stop loss of 845.
MARUTI - Stock has shown free fall from the top of the chart and now trading at support level on the daily chart and the RSI is also at support on the daily chart. We recommend buying from the current level for the target of 9500 with the stop loss of 9100.
BAJAJ-AUTO - Stock had have not a good week so far but now it is trading at support level on the daily chart and today it has also shown reversal on the daily chart and closed near to days high. We recommend buying from the current level for the target of 2800 with the stop loss of 2600.