Volatile week ahead for the bourses
Amidst heightened volatility, on the back of positive global cues, renewed FII buying and optimism over the green shoots in the economy; both Sensex and Nifty recorded their fourth straight weekly gains during the week ended.
Benchmark indices, the Sensex and the Nifty eked out marginal gains to close 135 points and 28 points higher to close the week at 28469 and 8822 respectively. Modest profit booking was seen in the midcap and smallcap space.
Growing noise over hike in US interest rate, increase in oil & metal prices may impact risk appetite and market sentiments but positive outcome of the GST council meeting may give fillip to bulls.
Investors are also observing the assembly elections, which are crucial for BJP, especially after demonetisation.
US stock market has been performing well ever since Trump took office. Investors are beginning to be sceptical over the longevity of the rally.
Near term direction of markets will be dictated by the outcome of assembly elections, F&O settlement, the trends in global markets, investment by FIIs and domestic institutional investors, the movement of rupee against the dollar and crude oil price movement.
For the week ahead, chartists predict trading range of 27850-28900 and 8640-8950 for the benchmark indices. Support for the indices evident at 28150 & 27850 and 8725 & 8625.
Don’t buy “cats and dogs” (unseasoned stocks).
HBL Power Systems is engaged in the business of manufacturing batteries. It is the world’s second largest manufacturer of Ni-Cd batteries and India’s second largest supplier of telecom batteries. Only Indian firm to possess Pure Lead Tin (PLT) battery technology; supplier of batteries for aviation applications – fighter and civil aircraft, helicopters and UAV applications approved by FAA and EASA for the supply of batteries to multinationals – Boeing and Airbus. Buy on declines for target price of `100.
Haldyn Glass is engaged in the business of manufacturing glass bottles. The company operates through glass bottles/containers segment. The company manufactures vials, which are used in pharma sector, and clear bottles, which are used in liquor manufacturing industry, cosmetics industry, and food and beverages industry. It has successfully completed upgradation of one of it’s furnaces with enhanced capacity along with other ancillary facilities. The entire capital expenditure was funded through company’s internal resources. Buy for medium term target price of `75.
IFB Agro Industries is engaged in the business of manufacturing alcohol, bottling of branded alcoholic beverages, as well as processed and packed marine foods both for domestic and export markets. The marine segment is involved in the marine product processing, for sale in export and domestic markets and marine feed trading. It also operates a grain-based distillery. Buy on declines for price target of `775. Ahead of the settlement week with renewed interest in BankNifty, brisk trading was seen in the derivative segment.
Trends in put/call ratio suggest continuation of bullish momentum. With Nifty closing above the psychological level of 8800, punters expect the index to cross 9000 level after a small correction.
Highest open interest concentration in option segment was seen at 9000 call and 8600 put options. Expect strong support to Nifty at 8700 level.
Led by HDFC Bank, Bank Nifty witnessed good buying interest. However, select PSU banks like Bank of Baroda witnessed selling pressure. Stock specific buying advised in the sector.
Share buyback season is back say observers.
Tata Consultancy Services’ announcement may pave way for other cash rich companies. Use “artificial” surges to exit from stocks like Infosys.
Cement stocks are witnessing sustained buying. Use corrections to buy Ultratech, ACC and India Cements.
Post announcement of Idea-Vodafone merger renewed interest was seen in telecom sector. Track Jio moves for spurt in RIL price.
PSU firms are expected to attract buying from funds.
Stocks looking good are Apollo Hospitals, Aditya Birla Nuvo, Dewan Housing, DCB Bank, Cadila Healthcare, Reliance Capital, Reliance Infra and M&M.
Trading Mantra: To spot an important low, watch for high volume as the stock moves down on a daily chart.