Dharmesh Shah, Head – Technicals, ICICI Securities
Where is Nifty headed?
Nifty is approaching maturity of price/time-wise correction as it retraced its May 2021 rally by just 38% over past 4 weeks, indicating robust price structure. Time-wise, it is expected to maintain rhythm of not correcting for over 3
consecutive weeks. We expect Nifty to eventually resolve out of 4-week consolidation of 15,500-15,900 in coming weeks and head towards our target of 16,100.
What should investors do?
Current consolidation shouldn’t be construed negative, rather an opportunity to buy as overall price structure remains strong. One should stick to quality as that is what can help navigate volatility at life highs. We recommend
investors to accumulate quality large cap and midcap stocks from our preferred sectors like IT, BFSI, Auto, Metals and Infrastructure.
Our preferred picks from large caps are Bajaj Finserv, Ambuja Cements, Tata Steel and Maruti Suzuki, for 8-10% over next quarter.
What is your outlook for TCS?
IT sector remains in a structural uptrend and we expect it to extend its outperformance. In case of TCS we expect price correction to be limited from hereon while short-term time correction is in the offing. For investors such a
corrective phase would present a buying opportunity.
Sriram Velayudhan, Vice President – Alternative Research, IIFL Securities
Where is Nifty headed?
Although Nifty has drifted below the key short-term day moving averages and taken support at the 34-day exponential moving average, it has been trading in a range akin to what we saw between February and May this
year. We expect the index to trade in a range of 15,600-15,900.
What should investors do?
As we expect the trading range to breakout higher, investors can buy at the money monthly Nifty call option of 15,700 strike. With volatility on the lower side resultant costs of options also makes the risk to reward favourable.
What is your outlook for TCS?
TCS has closed at important cluster supports. In an event where stock finds difficulty to rebound, one can expect
further weakness till Rs 3,110 levels.
Navneet Daga, Senior Derivatives Analyst – Institutional Equities, YES Securities
Where is the Nifty headed?
We maintain our stance of consolidation on the index within band of 15,600 to 15,900 in the short term, with
the sector churning in focus within index stocks. India VIX trading below historical averages suggests tight band trades will continue. In coming week, we expect Nifty to find strong support at the 15,600-mark.
What should investors do?
We recommend a short strangle strategy for the index. In futures expiring 29th July, we recommend selling 16000
call and 15500 put with total inflow of 160 points for target on inflow of around 40/10 points and stop loss of 225 on
spread. We reiterate buy call on Tata Steel with a target price of Rs 1,300 and downside support is now placed at Rs 1,185. In short term, Rs 325 looks possible on DLF with support at Rs 288.
What is your outlook for TCS?
Volatility levels corrected sharply in TCS post results. We expect the stock to find support near Rs 3,150 mark, while upside in near term will be restricted to Rs 3,320 levels.
