Analyst: Dharmesh Shah, Head – Technical
The weekly price action formed a bear candle with a long lower shadow, highlighting supportive efforts emerging near the crucial support area of 14,400. Going ahead, we expect the index to trade with a positive bias in the broad range of 14,400-15,000 amid stock-specific action. Since May 2020, there have been three instances of Nifty correcting by 7% to 9%, while the 50-day has acted as a strong support in each of the instances.
In the current scenario as well, Nifty has already corrected by 7% and is forming a higher base around the 50-day EMA. We expect the index to maintain the same rhythm and witness a rebound as risk-reward is favourable. Hence, the current breather should be used as an incremental buying opportunity in quality large and midcap stocks.
Analyst: Dharmesh Shah – Head Technical
| Stock | Reco. | CMP (Rs) | Target (Rs) | Stop Loss (Rs) | Note |
| TCS | Buy | 3,128 | 3,340 | 2,998 | Price sustaining above the recent falling channel breakout area containing last two months’ breather and a higher base above 50-day EMA |
| Divis Labs | Buy | 3,404 | 3,645 | 3,280 | Price rebounding from 50 weeks EMA and the 80% retracement of previous major rally (2,985-3,915), thus provides favourable risk reward set up |
| Adani Ports | Buy | 722 | 790 | 680 | Stock in strong uptrend forming higher peak and trough in all time frame. It has generated a breakout above a falling channel containing last two weeks breather |
F&O Strategy
Analyst: Raj Deepak Singh, Head Derivatives
Buy Bata India
CMP: Rs 1,480
Target: Rs 1,545
Stop loss: Rs 1,455
Rationale:
- In the recent leg of profit booking in the Nifty, Bata remained quite resilient and consolidated above Rs 1,450 levels. In the last couple of sessions, the OI in the stock was declining and no major OI shifted to the April series, which is pointing towards an ongoing short covering.
- We believe the stock could move upwards as it has found support from its major Put base on the back of short covering in the settlement week. Hence, Bata can be bought around current levels for an upside target of Rs 1,560.
Covered Call strategy:
Buy Bharti Airtel April Futures at 530-532 and short Bharti Airtel April 560 Call at 12-14
Rationale:
- As the new series is going to start, due to elevated IVs, ATM Straddle of 530 has the highest OI block, which is fetching a good premium. However, for the current month, Bharti has been witnessing closure in OI, whereas no significant OI blocks moved to the next series indicating positive bias.
- Despite closure in OI for the March series, Bharti Airtel has been consolidating above 510 for a couple of sessions. Along with it, delivery pickup was also observed near 520-525 levels.
FX Strategy:
Sell USD-INR at 72.60-72.65
Target: 72.30
Stop loss: 72.75
Rationale:
- The rupee appreciated last week and started the new week on an optimistic note along with decline in OI, indicating covering.
- As the dollar index again slipped below 92 levels, we feel the current uptrend in the rupee would continue.
| Resistances | 72.70 | 72.80 | 72.90 |
| Supports | 72.50 | 72.40 | 72.30 |
Short GBPINR: Sell GBP-INR at 100.60-100.70
Target: 99.80
Stop loss: 100.95
Rationale:
- GBP-USD is facing supply on the higher side and is finding it difficult to sustain above 1.39 levels.
- Weakness in GBP should continue as the Dollar index is sustaining at higher levels. This should push GBP-INR below 100 levels.
| Supports | 99.70 | 100.00 | 100.20 |
| Resistances | 100.70 | 100.85 | 101.00 |
