Analyst: Dharmesh Shah – Head Technical
Weekly price action formed a high wave candle, indicating elevated volatility as the index continues to consolidate in the broad range 14m250-14,800 in the last five weeks. Despite Monday’s gap down opening, the index managed to hold onto the lower band of consolidation placed at 14,250 on a closing basis. Going ahead, in the ongoing truncated week, only a decisive breach of the last five weeks consolidation range 14,250-14,800 would indicate directional move; else expect prolongation of consolidation amid stock-specific action.Analyst: Dharmesh Shah – Head Technical
| Stock | Reco. | CMP (Rs) | Target (Rs) | Stop Loss (Rs) | Note |
| TCS | Buy | 3,164 | 3,354 | 3,045 | A higher base formation at the 50-day EMA and the lower band of the rising channel in place since September 2020 thus provides favourable risk reward set up |
| Cipla | Buy | 950 | 1,025 | 905 | Stock in strong up trend sustaining above the rising trendline breakout area joining previous highs since August 2020 and MACD in buy mode |
| Graphite India | Buy | 629 | 695 | 590 | A shallow retracement and a higher base at the 61.8% retracement of the previous up move (482-740) |
F&O Strategy
Analyst: Raj Deepak Singh, Head – Derivatives
SBI Life: Protective Put Strategy
Long SBI Life April futures at 906-908 and long April 900 Put at 911
Target: 980
Stop-loss: 875
Rationale:
a) Stocks from the life insurance space have come under selling pressure in the recent market correction. However, SBI Life has shown significant resilience to the market and largely remained above 875 levels. We believe that the stock may witness a fresh round of upsides towards Rs 1,000 in the days to come.
b) The Put base at Rs 900 strike for SBI Life is significantly higher than any Call option base and a round of short covering towards settlement if it remains above these levels. However, considering the volatility in the markets, we recommend a protective Put strategy in the stock.
Lupin: Covered Call Strategy
Long Lupin April futures at 1070-1075 and Short April 1140 Call at 9-11
Target: 1,150
Stop-loss: 1,025
Rationale:
a) Pharma stocks have been witnessing significant buying interest and despite broader weakness, they were able to hold their levels. Stocks like Lupin have shown signs of outperformance and we expect further up move towards 1,150 in the stock in the near term.
b) The open interest in the stock has risen by more than 30%, while stock has largely remained in the range in the April series. We believe long positions are formed in the stock and a covered call strategy can be done in the stock.
FX Strategy:
1) Sell USD-INR
Sell USD-INR at 75.20 – 75.20
Target: 74.60
Stop loss: 75.45
Rationale:
- In the recent few days, INR witnessed extreme high volatility due to sharp rise in Covid-19 cases and RBI G-SAP buying.
- However, the index remained choppy and Call writing observed in OTM strike is indicating limited downside for INR.
| Supports | 74.90 | 74.80 | 74.60 |
| Resistances | 75.30 | 75.40 | 75.60 |
2) Long EUR-INR
Buy EUR-INR at 89.80-90.00
Target: 90.90
Stop loss: 89.40
Rationale:
- As there was a sharp fall in INR, most of the currencies have appreciated against rupee due to which EUR-INR moved to 90 levels.
- Even the Euro has strengthened against the Dollar, which is trading above 1.20 levels. This should provide some upsides in the pair, which is likely to make new high.
| Supports | 89.70 | 89.50 | 88.30 |
| Resistances | 90.30 | 90.65 | 90.90 |
