Nifty 50 needs to hold above 16550, traders need to use buy-on-dips strategy; check stocks to buy
By Rahul Shah
Indian equities managed to post weekly gains for the third time in a row. Both the indices have gained over 1.5 per cent during the past week, thanks to a jump of nearly 8 per cent in the stock Reliance Industries Ltd. (RIL) Nifty closed with a gain of 232 points at 16584 and Sensex up 885 points at 55769, compared to last week’s close. India reports May service PMI at 11-year high (highest since April 2011), quarterly GDP growth of 4.1% (expected 3.9%), strong monthly auto sales data during the month of May and GST collection above Rs 1.4 lakh crore Gave. Third consecutive month. The beaten tech stocks saw fresh buying after falling 15-20% in the past few sessions. Cement stocks fell sharply after sector giant UltraTech approved a capex of $1.7 billion to increase capacity. The market is expected to see a significant increase in cement capacity to miss the demand-supply match. Besides, rising input cost (oil price) could have a negative impact on cement companies.
This week will be important for Indian stock markets reserve Bank of India Credit policy meeting. Market expectations, RBI will increase the interest rate by 50bps from 4.40% to 4.90%. RBI Governor’s remarks, for future course of action, will be crucial for the market sentiment. RBI has unexpectedly hiked the interest rate by 40 bps a month back on concerns of high inflation. However, despite strong economic data in the past few days, the global market trend (US market) will be important for our market.
Markets are likely to remain in a broad range on local and global cues including geopolitical developments, volatility in crude oil prices and institutional inflows. US markets fell more than 1% over the past week after data on a stronger-than-expected economy prompted traders to raise bets that the US Federal Reserve will remain aggressive in its fight against inflation. , because US inflation peaked for 40 years. High. Investors continue to worry about whether the Federal Reserve’s rate hike and monetary tightening will push the US economy into recession. As a result, traders avoid aggressive buying interest and buy on volatile market downside strategies. Bharat VIX There is some relaxation in the downside of 10% below the 20 level. G-Sec yield hit a 3-year high at around 7.46% and USDINR hit a record high of around 77.65, which is a major concern in the domestic market.
Nifty needs to be placed above 16550 zone to move towards 16800 and 17000 zone while support is placed at 16442 and 16400 zone.
Target: Rs 265 | Stop Loss: Rs 234
BEL has given a falling supply trend line breakout which is formed by connecting swing highs of 258, 240 and 235 zones. It retested the breakout zone on a weekly scale and moved higher. Buying is visible in the defense sector and short follow-up could take it towards higher areas’ Oscillator is also placed on a positive daily and weekly scale and supports are gradually shifting higher. • Considering the current chart structure, we recommend traders buy the stock for a move towards 265 with a stop loss of 234.
Target: Rs 1175 | Stop Loss: Rs 1100
Trent has given a range breakout for the last nine trading sessions and has taken a good hold on the same. It has also given a narrow range breakout on a weekly scale and closed above its crucial 200 DEMA. The RSI oscillator is also placing positively on the daily and weekly scale and support is slowly moving higher. • Considering the current chart structure, we recommend traders to buy the stock for a move towards 1175 with a stop loss of 1100.
(Rahul Shah is Senior Vice President, Group Advisory Leader-PCG, Broking & Distribution Motilal Oswal Financial Services, The views expressed are those of the author. Please consult your financial advisor before investing.)