Bulls took control of D-Street and pushed Nifty above its crucial level of 11,000 on Tuesday. Fall in crude oil price, better than expected earnings from Federal Bank & Ashok Leyland, as well as strong currency helped the index to climb the wall of worries.
The S&P BSE Midcap index which plunged over 2�percent on Monday recouped most of its losses and closed higher by 2.1 percent, a welcome sign for the bulls.
The pullback was largely a renewed buying based on a few technical factors that are favouring the bull.
The lagging Indicator MACD has retested the Zero line and is positive since July Series indicating the bullish trend in the medium term.
related news What changed for the market while you were sleeping? Top 15 things to know Trade Setup for Wednesday: Top 15 things to know before Opening BellThe next resistance is placed at 11,170 which is a previous all-time high.
Analysts maintain a buy on dips strategy with the target of 11,250 �� 11,300 on the upside while a recent swing low of 10,900 can be kept as a stop loss.
On the earnings front, 17 companies will report their results for June quarter which include names like Bandhan Bank, HT Media, Mastek, Mindtree, NIIT Technologies, Reliance Communications, and UltraTech Cements.
Mindtree Q1 PAT likely to rise by 77�percent YoY to Rs 164.80 crore
NIIT Technologies: Q1 PAT likely to rise by 51 percent YoY to Rs 77.80 crore
UltraTech Cement: Q1 PAT likely to fall by 32 percent YoY to Rs 604.60 crore
(Note: All estimates from Motilal Oswal)
Stocks in news:
PSU Banks will be in focus after government announced an infusion of Rs 11,336 crore in five public sector banks as part of its Indradhanush scheme, which was unveiled in 2015. This is the last tranche of infusion under the scheme.
Zee Entertainment Enterprises reported 31 percent jump in its Q1FY19 (April- June) at Rs 325.88 crore against Rs 248.25 crore in the same quarter last fiscal.
IDBI Bank: The public sector lender, IDBI Bank, will soon seek an approval from the government for the proposed investment by Life Insurance Corporation of India (LIC). The latter, which holds 7.98 percent stake in the bank at present will buy additional 43.02 percent in former once it gets the approval from the Cabinet.
Big News:
Big bonanza for PSU banks
The government has announced an infusion of Rs 11,336 crore in five public sector banks as part of its Indradhanush scheme, which was unveiled in 2015.
This is the last tranche of infusion under the scheme.
The five banks are Punjab National Bank (PNB), Indian Overseas Bank (IOB), Andhra Bank, Corporation Bank & Allahabad Bank.
Of the Rs 11,336 crore, Rs 2,816 crore will be infused in PNB, Rs 2,157 crore in IOB, Rs 2,019 crore in Andhra Bank, Rs 2,555 in Corporation Bank, and Rs 1,790 crore in Allahabad Bank.
Technical Outl0ok:
The index formed a strong bullish candle on daily charts.
The closing above 11,000-mark is a good thing but to maintain that momentum, the index has to close above 11,080 levels and then only it can be able to march towards its earlier life time high of 11,171 seen in January, experts said.
Traders are advised to create fresh long positions with a stop loss below 10,925 on closing basis and look for bigger targets around 11,171.
Three levels: 10925, 11000, 11080
Max Call OI: 11000, 11100
Max Put OI: 10600, 10800
Option band signifies an immediate trading range in between 10,929 to 11,080 zones.
Stocks with high delivery percentage: Eicher Motors, RBL Bank, Marico, HDFC.
92 stocks saw long buildup: Adani Power, Bata India, Federal Bank
11 stocks saw a short build-up: MindTree (ahead of results), Marico, PC Jeweller
Technical Recommendations:
We spoke to Yes Securities and here��s what they have to recommend:
Titan Company: Buy| LTP: Rs 845 | Target: Rs 900-930 | Stop loss: Rs 800 | Return 7-10%
V-Guard Industries: Buy | LTP: Rs 192 | Target: Rs 207-216 | Stop loss: Rs 183 | Return 8-12%
Axis Bank: Buy | LTP: Rs 537 | Target: Rs 565-580 | Stop loss: Rs 519 | Return 5-8%
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. First Published on Jul 18, 2018 07:05 am
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