A morning walk down Dalal Street | Breach of 200-DMA around 10,750 could fuel selling pressure

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A morning walk down Dalal Street | Breach of 200-DMA around 10,750 could fuel selling pressure

Friday was a day of consolidation for Indian markets, but one big positive takeaway is that Nifty50 managed to reclaim 10,800 levels.

On the weekly charts, the S&P BSE Sensex rose 0.8 percent while the Nifty50 witnessed a rise of 1.05 percent. Broader market outperformed as the BSE Midcap index rose 3.2 percent while the S&P BSE Small-cap index closed 2.8 percent higher.

Let’s see how the final tally looked like for D-Street on Friday – the S&P BSE Sensex rose 33 points to close at 35,962 while the Nifty50 ended 13 points higher at 10,805.

Sectorally, PSU, oil & gas, and telecom stocks rose 1-3 percent while profit taking was seen in consumer durable and healthcare stocks.

Trading volume is expected to reduce for the next couple of weeks, especially after the Federal Reserve policy meeting and the Christmas-and-New Year vacation.

One crucial event which is lined up for this week is the US Fed meeting, which will begin from December 18. Analysts largely expect the Fed to raise its benchmark interest rate by 25 bps to between 2.25 percent and 2.5 percent, but are cautious about rate hikes in 2019, considering the potential slowdown in economic growth.

Another important factor to watch would be the movement of the rupee throughout this week. The currency depreciated for the second consecutive week, down 109 paise, or 1.54 percent, to end at 71.89 against the dollar as demand for the greenback remained strong ahead of this week’s Fed meeting.

One good news is that foreign institutional investors, so far in December, have continued to remain net buyers in equities to the tune of around Rs 3,000 crore, after buying Rs 10,563 crore in November.

Big News:

The big news comes from the macro front.

Exports rose by 0.8 percent in November while the trade deficit widened to $16.6 billion

The deficit widened despite a steep decline of 15.6 percent in gold imports at $2.75 billion during the month under review.

Imports rose by 4.31 percent to $43.17 billion during the month, leading to a widening of the trade deficit to $16.67 billion.

The trade deficit during the period widened to $128.13 billion as against $106.37 billion during April-November 2017-18.

Technical View:

Nifty formed a bullish candle which resembles an Inside Bar or a Hanging Man kind of pattern on the daily charts

Most experts feel that for bulls to regain control, Nifty50 has to close above 10,838-10,930 levels. However, a breach of 200-DMA placed around 10,750 could fuel the selling pressure with an initial downside target of 10,560.

Three levels: 10752, 1038, 10950

Max Call OI: 11000, 10900

Max Put OI: 10000, 10200

Technical Recommendations:

We spoke to Way2Wealth Brokers Ltd and here’s what they have to recommend:

Dabur: Buy around Rs 435-430| Target: Rs 480| Stop Loss: Rs 410| Return 8.6%

Indian Bank: Buy around Rs 240| Target: Rs 265| Stop Loss: Rs 228| Return 10%

Ashok Leyland: Sell around Rs 104-105| Target: Rs 96/92| Stop Loss: Rs 109| Return 11%

Disclaimer: The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Images are for reference only.Images gathered automatic from google.All rights on the images are with their original owners.

2018-12-18 12:53:08

Images are for reference only.Images gathered automatic from google.All rights on the images are with their original owners.

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