Podcast | A morning walk down Dalal Street: Nifty needs to hold 11,000 for further upmove

A historic day for Indian markets! The S&P BSE Sensex created history as it moved past its earlier record high of 36,443 records in January 2018 to hit a fresh intraday record high of 36,699.53 but witnessed selling pressure in the second half and closed 0.78 percent higher to a fresh record closing high.

The Nifty50 failed to hit a record high but closed above its crucial level of 11,000 in trade on Thursday.

It looks like investors preferred to book profits at higher levels as the index formed a shooting star kind of pattern which also signals a reversal of the trend.

Overnight selloff in Brent crude prices and positive global markets helped Indian markets to extend gains.

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Nifty is still 148 points away from its all-time high of 11,171, registered on January 2018. Nifty closed above 11,000 for the first time since February 1, 2018.

Gain in the benchmark indices was largely backed by heavy weighted stock,Reliance Industries which surged more than 4percent, to close at new all-time highs.

The level of 10,900 is the key level to watch out for as a support for Nifty.

The Indian rupee opened flat at 68.76 per dollar on Thursday, closed at 68.56/USD, lower by 21 paise.

On the institutional front, FPI sold shares worth Rs 742 crore while DIIs bought shares worth Rs 366 crore, according to provisional data.

Big News:

After stellar results from Tata Consultancy Services, all eyes will be on Infosys.

Infosys likely to report 8.5percent YoY rise in net profit to Rs 3784.20 crore for the quarter ended June, according to estimates by Motilal Oswal.

The brokerage firm maintains a buy call on the stock. The stock trades at 17.4x FY19E and 15.0x FY20E earnings.

It also expects acceleration in growth, led by seasonal strength, resulting in 2.3percent QoQ CC growth in Q1FY19.

Cross-currency headwinds are expected to result in 1.1percent QoQ growth indollar terms.

Infosys will likely report 2.7percent c/c revenue growth largely due to seasonal strength and ramp-up of deals won in H2FY18, according to Kotak Institutional Equities.

Technical Outlook:

Index formed a Shooting Star kind of pattern on daily charts

This pattern is usually formed in an uptrend and is treated as a reversal pattern, but it would require confirmation before we can conclude that the trend will get reversed in near future

Some profit booking at higher levels made traders cautious about coming sessions. Hence the index needs to hold 11,000-mark for further uptrend but if it falls below that level, then there could be some selling pressure, experts said.

Nifty50 can come under selling pressure if it trades below 10,999 on Friday.

On a breach of 10,976 indices may initially extend their downswing up to 10,900 levels.

Upsides shall once again resume on a close above 11,078 which shall then lead to a retest of lifetime highs.

Max Call OI: 11000, 11100

Max Put OI: 10600, 10700

Stocks with high delivery percentage: Power Grid, Castrol India, Colgate Palmolive.

42 stocks saw long buildup: Arvind, Britannia Industries, MRF, Marico.

73 stocks saw a short build-up: Adani Ports, Ambuja Cements, ZEE Entertainment, Federal Bank.

Technical Recommendations:

We spoke to IIFL and heres what they have to recommend for intraday trading:

Wipro: Buy | Target: Rs 303 | Stop loss: Rs 267 | Return: 8.5%

Dr Reddys Labs: Buy | Target: Rs 2,517 | Stop loss: Rs 2,272 | Return: 7%

Bajaj Electricals: Buy | Target: Rs 611 | Stop loss: Rs 536 | Return: 9%

Disclaimer: The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
First Published on Jul 13, 2018 06:50 am

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