Barring couple of days, it was clearly a challenging week for our markets; in fact for all markets
across the globe. In the previous week, things looked in control with respect to coronavirus, but all of a sudden this mid-week, the aberration was seen in numbers that certainly spooked market participants. In addition to this, some macro data on domestic front like the IIP and Inflation numbers disappointed to a great extent. Eventually, it appeared as if the markets
have digested this and are about to move higher. Suddenly from nowhere, the Supreme Court commands telecom companies to pay AGR dues and this led to a sharp selloff in few banking heavyweights. As a result, the Nifty corrected sharply on Friday to erase major chunk of weekly gains.
With reference to our previous week’s commentary, things were very much on track and as per our anticipation; Nifty surpassed the hurdle of 12150 – 12170. But these developments resulted into retesting of the 12,100 mark. With a broader view, previous week’s recovery from 11,600 was crucial for the markets
and hence, as of now the undertone still remains bullish. As far as levels are concerned, 12,090 followed by 11,990 would be seen as a key support zone. Within this large uptrend, if the index slides below 11,990 then we may see some pause to the optimism. Otherwise, we remain upbeat and once the banking stocks start chipping in, the Nifty is likely to reclaim 12,220 – 12,300 in coming weeks.
Clearly, the banking index was the weakest link along with the midcap index. But never mind, their higher degree charts are still promising and hence, we expect buying to emerge at lower levels. It would be too early to comment on this, but the daily chart of Bank Nifty is depicting a right shoulder of ‘Inverse Head and Shoulder’ in the making. We will keep our fingers crossed and will hope to see this anticipation turning into a reality.
– This has been one of the underperforming stocks in last 10 – 12 months. However, recent price action looks quite encouraging. In the midst of all volatile moves early this month, the stock price has stabilized around 430 and from thereon, we witnessed a V-shaped recovery to confirm a ‘trend line’ breakout last week from the hurdle of 490. Importantly, in this recent up move, the volumes increased considerably, indicating strong buying interest in the stock. Although, the follow up buying was missing, we expect the stock to do well. Thus, we recommend buying this stock for a target of Rs 542 over the next days. The stop loss should be fixed at Rs 470.20.
NSE Code – LUPIN
– Last four- five years have been a nightmare for most of these marquee large cap ‘Pharma’ names. Hopeful investors are keeping their fingers crossed for last many months with the expectations of some revival. This stock is clearly pouring water on all those expectations one after another. Still, looking at the Friday’s outperformance, we are at least sensing some near term relief in this stock. Looking at the placement of ‘RSI-Smoothened’ on daily chart, we are a bit convinced of this probable up move. Looking at the favorable risk reward ratio, traders are advised going long for a target of Rs.745 over the next few days. The stop loss should be fixed at Rs.702.
Disclaimer: The author is Chief Analyst- Technical & Derivatives at Angel Broking. He may have positions in one or all of the above mentioned stocks. Views expressed are his own.