Outlook: Nifty
Analyst: Dharmesh Shah – Head Technical
The weekly price action formed the strongest bull candle since April 2020. In the process, the Nifty and Midcap index witnessed a faster retracement as six sessions’ corrective decline was completely retraced in just three sessions, highlighting inherent strength.
Going ahead, we expect the index to head towards 15,500 in the coming weeks as it is 161.8% external retracement of past two week’s fall (14754-13596) led by strong momentum in cyclicals.
We believe broader market to witness a catch up activity and outperform the benchmark index in the coming weeks
| Stock | Reco. (Rs) | CMP (Rs) | Target (Rs) |
Stop Loss (Rs) | Note |
| Kotak Bank | Buy | 1,957 | 2,140 | 1,868 | Strong buying demand emerged from the previous breakout area, supported by faster retracement as four weeks decline (2027-1696) was completely retraced in just one week |
| Grasim Industries | Buy | 1,212 | 1,330 | 1,145 | Price in strong up trend trading in a rising channel forming higher high-low in all time frame |
| EIH Limited | Buy | 99 | 113 | 91 | Stock forming a higher base at the rising demand line joining lows since July 2020 and 52 weeks EMA thus provides favourable risk reward set up |
F&O Strategy:
Raj Deepak Singh, Head Derivatives
Buy Sun Pharma
CMP: Rs 632
Target: Rs 660
Stop loss: Rs 615
Rationale:
- Post the quarterly numbers of Sun Pharma, the stock managed to move and close above its previous Call base of 600. Follow up momentum was visible throughout the week on the back of closure in Call OI positions.
- Highest addition recently was seen in 650 and 660 Call strikes, which should be the target for the coming sessions. Recently, the stock saw accumulation of long positions whereas writing blocks are visible in 600 and 620 Put strikes that are strong support for the week
Buy Ambuja Cement
CMP: Rs 274
Target: Rs 305
Stop loss: Rs 255
Rationale:
- The open interest in Ambuja Cement has increased gradually in the last two months along with incremental stock price. Current OI in the stock is at a four-month high. Considering continuous additions and resilience of the stock, we expect further fresh accumulation to be seen, which should take it higher in the coming sessions
- The stock has been witnessing accumulation near the support level of 250. With continued Put writing in 250 and 260 strikes, we expect downside risk to be limited. On the other hand, Call OI of 290 and 295 strike is already witnessing closure of positions suggesting upsides in the stock.
Forex Strategy:
Long US$INR at 72.90-73.00
Target: 73.40
Stop loss: 72.70
Rationale:
- Dollar index retraced to 91 levels and found support which is likely to keep EM currencies in check.
- Since few session volatility has declined in INR and we feel overall its likely to trade in range. However, bounce could be seen in pairs due to sizable Put OI in 73 strikes.
| Resistances | 73.30 | 73.40 | 73.50 |
| Supports | 73.0 | 72.85 | 72.7 |
Sell EUR-INR at 88.00-88.10
Target: 87.0
Stop loss: 88.40
Rationale:
- Sharp reversal was seen in recent days due to weakness in the Euro. EUR-USD fell from levels of 1.22 levels to 1.20 levels.
- Recent profit booking in EUR-INR is likely to continue as it has violated its support of 88. Now it’s likely to head towards 87 levels.
| Supports | 87.00 | 87.40 | 87.80 |
| Resistances | 88.05 | 88.20 | 88.40 |
