By Ajit Mishra
Markets oscillated in a broader range in the passing week and settled almost unchanged, taking a breather after the recent fall. Though benchmark indices made multiple attempts for recovery, weak global cues combined with pressure in the select heavyweights continued to weigh on the sentiment and capped the move. Meanwhile, a mixed trend on the sectoral front kept the traders busy wherein realty and pharma edged higher while IT and auto ended in the red. And, the outperformance by the broader indices also eased some pressure.
Despite the corrective tone, we are seeing select stocks across sectors holding strong, offering buying opportunities. Besides, the broader indices are still holding firm above their short term moving average (20 EMA), further adding the positivity. Amid all, we feel it is prudent to maintain stock-specific approach with a focus on risk management.
On the benchmark front, traders should plan their positions around the key supports and resistances citing the prevailing choppiness. We also identified some of the stocks from the F&O baskets, which can be considered for long and short trades.
Nifty (CMP: 19,638.30)
Nifty made multiple attempts to cross the hurdle of short term moving average i.e. 20 EMA last week but couldn’t succeed. Going ahead, the tone would remain bearish until it crosses 19,750 and expect the 19,200-19,450 zone to be tested soon. On the flip side, a decisive break above that hurdle may fuel a recovery to 19,850-20,000.
Bank Nifty (CMP: 44,584.50)
The banking index is also struggling within the moving averages ribbon, mainly due to the underperformance of the private banking majors. A break below 44,100 could trigger the next leg of down move towards the 43500-43800 zone. In case of a recovery, we need sustainability above 44,900 to retest the 45,300-45,900 zone.
Stocks to Watch
Bullish- Bajaj Finance, Dalmia Bharat, Dixon, DLF, Grasim, Heromotoco, Hindalco, ONGC
Bearish- ABB, Gujarat Gas, HDFC Bank, Kotak Bank, Pidilite Industries, SBI Cards, UPL
(Ajit Mishra, SVP- Technical Research, Religare Broking. Views expressed are author’s own. Please consult your financial advisor before investing.)
