On the day of the weekly expiration of index options, the benchmark index witnessed profit booking. Post muted opening, the market registered selling pressure. The Nifty/Sensex opened at 15,238.70/ 51,903.86 and due to constant selling pressure, erased over 100/400 points.
Among sectors, financial services, auto and private banks witnessed selling pressure, while the Nifty PSU Banks gained the most, rallying over 5.50 per cent. We are of the view that the market is likely to continue the narrow range activity and PSU Banks and selective midcap and smallcap stocks will outperform in the near future.
Technical
On the daily charts index, higher bottom series formation and the texture of the market suggests uptrend is likely to continue if Nifty succeeds to trade above 15,050. Above the same, we can expect one more leg of the up move, up to 15,250, 15,330.
On the flip side, dismissal of 15,060 would result in further weakness and in that case Nifty could retest previous lows of 14,970. However, the strategy should be to buy between 15,000 and 14,950 and to keep a stop loss at 14,900 levels. The focus should be on the largecap companies as the market is approaching the major support area.
Tech Picks
Analyst: Shrikant Chouhan, Executive Vice President – Technical Research
Tech Mahindra: BUY
- CMP: Rs 1010.6
- Target: Rs 1040
- Stop loss: Rs 990
The stock has given a range breakout with a strong bullish Marubozu candlestick formation on the daily chart.
Asian Paints: BUY
- CMP: Rs 2470.75
- Target: Rs 2550
- Stop loss: Rs 2430
A reversal from multiple support near the important retracement point with incremental volume activity is evident.
Tata Power: BUY
- CMP: Rs 93.1
- Target: 97
- Stop loss: Rs 91
Higher high and higher low chart formation indicates bullish continuation in stock to remain in the near term.
BPCL: BUY
- CMP: Rs 432.2
- Target: Rs 445
- Stop loss: Rs 425
The stock has given a breakout from inverse head and shoulder chart formation with rising volume on the daily chart.
F&O Strategy
Analyst: Sahaj Agrawal, Head of Research- Derivatives
Futures:
BUY Dabur Future at 520
Trend line Support seen at 515 on spot.
Options:
Nifty Bull Call Spread: 25-Feb Series:
- Buy 15100 CE @ 155 and Sell 15400 CE @ 40
- Premium outflow (Cost):115
- SL: 50
- Target: 250/300
Nifty is trending up with an immediate support of 15000. With Market Breadth remaining healthy, we expect Nifty to re-test 15400 levels.
Forex & Interest Rate Technical
Analyst: Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives
USDINR: Sell between 74.80/73.00
Target: 72.20/72.00
Stop loss: 73.20
Commodity Calls
Analyst: Ravindra Rao, VP- Head Commodity Research
| Commodity | Exchange | Strategy |
| Gold (Apr) | MCX | Buy at 48700/48600; TP: 49200/49400; SL: 48500 |
| Crude Oil (Feb) | MCX | Sell at 3870/3880; TP: 3770/3750; SL: 3930 |
| Copper (Feb) | MCX | Sell at 595/597; TP: 585/583; SL: 601 |
| RSO (Feb) | NCDEX | Buy at 1065/1063; TP: 1090/1100; SL: 1050 |
