Wednesday, October 30, 2019

D-Street: Above 11,884, Nifty may test 11,981; create fresh long on dips

D-Street: Above 11,884, Nifty may test 11,981; create fresh long on dips

As long as the Nifty holds above 11,700 levels, bulls should be able to regain control


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The festive cheer pushed the Nifty and Sensex above crucial resistance levels on October 30, with the latter closing above 40,000 for the first time since June 4.

Let’s look at the final tally on D-Street – the BSE Sensex rose 220 points to end at 40,051 and Nifty ended 57 points higher at 11,844 on October 30.

The rally was broad-based with most gains coming in the public sector, followed by IT, and oil & gas indices.

On the macro front, investors would react to infrastructure output data, and volatility could remain as we head towards expiry on October 31.

Experts feel expectations of new reforms from the government, better-than -expected results from India Inc, divestment in PSU companies, and further rate cut hopes will lift sentiment.

Overnight, US markets ended higher with the S&P 500 closing at a record high for the second time in three sessions, after the US Federal Reserve decided to cut interest rates by a quarter of a percentage point.

The Commerce Department's advance reading of third-quarter GDP showed the US economy expanded at a 1.9 percent annual rate, down from two percent in the second quarter but beating the 1.6 percent growth rate that analysts expected.

The next big question in front of investors is -- should one book profits at current levels? The rally is showing signs of fatigue at higher levels, hence some consolidation could take place. But, the overall momentum still remains intact.

Investors should use any dips to accumulate quality stocks as the market look poised to hit fresh highs in the next few weeks, suggest experts.

On the institutional front, FPIs were net buyers in the Indian markets to the tune of Rs 7,192 crore while DIIs were net sellers to the tune of Rs 185 crore, provisional data showed.

Big News:

On the earnings front, as many as 41 companies will declare their results for the September quarter which include names like BF Utilities, Blue Dart, IOC, Jindal Saw, Syndicate Bank, Tube Investment, and Vaibhav Global.

Technical View:

The Nifty50 closed in the green for the fourth consecutive day in a row

The index formed a “Hanging Man’ kind of candle on the daily charts which suggests a probable top in place

For the pattern to get confirmed the index has to close in the red on Thursday

But, as long as Nifty50 holds above 11700 levels, bulls should be able to regain control

If Nifty sustains above 11884 levels on Thursday, then an initial target of 11981 can be expected. Contrary to this breach of 11784 levels on downsides can trigger profit booking in the near term, suggest experts.

For time being traders are advised to create fresh longs by making use of dips into the zone of 11750 – 700 levels, they say

Three levels to watch: 11784, 11883, 12000

Max Call OI: 12000, 11800

Max Put OI: 11800, 11700

Stocks in news:

Bharti Airtel: Fitch placed Bharti Airtel on Rating Watch Negative on Supreme Court ruling.

Sonata Software: Q2 Profit rises 7.8 percent to Rs 72.2 crore versus Rs 67 crore, revenue dips 19.6 percent to Rs 703.1 crore versus Rs 874.6 crore QoQ.

Ramco Industries: Q2 Profit jumps 39.8 percent to Rs 50.6 crore versus Rs 36.2 crore, revenue declines 2.7 percent to Rs 220.6 crore versus Rs 226.8 crore YoY.

Technical Recommendations:

HPCL: Buy| LTP: Rs.318 | Target Rs 340| Stop Loss: Rs 305| Upside 7%

Bosch Ltd: Buy| Range Rs 15,200 – 15,000| LTP: Rs 15,591 | Target: Rs 16,570 | Stop Loss: Rs 14,450| Upside 6%

IGL: Buy| Range 378 – 375| LTP: Rs.383| Target: Rs 404 | Stop Loss: Rs 360| Upside 5%

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