NIFTY Index Chart Analysis

Q1 earnings act as catalyst as benchmarks peak and broader indices bottom out 

Indian benchmark indices breached their major resistances and are hitting all-time high levels. Sensex had hit its first all-time high after January on July 12, while Nifty did it for the first time on July 26. Currently, the indices are trading at their peaks, making higher highs on a daily basis. The broader markets too witnessed bottom fishing and have succeeded in breaking their prior major resistances, depicting trend reversal in Mid-cap and Small-cap indices. 

The FIIs have turned net buyers for the first time after March 2018, reporting net equity investment of Rs 2408.5 crore in the month of July. The DIIs continued to buy, but their buying remained modest in July 2018 at Rs 4503 crore, its lowest since February 2018. 

The revival in the domestic macroeconomic numbers, followed by robust corporate earnings for Q1FY19, have acted as the catalysts for this northward movement. Further, the Brent oil had slipped below its crucial support of USD 72.45/barrel and thereby the Indian rupee went off its all-time low, which further buoyed the markets. However, the markets did not react much to the bounce-back in the oil prices above USD 75/barrel. 

Further, the RBI is expected to keep the rates unchanged in its upcoming policy, despite higher CPI and WPI amid high fuel prices. We are at the doorstep of the release of macros and the core infrastructure output and PMI numbers are likely to direct the markets followed by auto sales numbers for July. 

Technically speaking, our benchmark index Nifty broke its major resistance at 11080, where it also breached its range of 10925-11080. Nifty also surpassed its range target at 11235-11250 level. In case Nifty continues with the upside rally even above 11375, we hold 11450 as the immediate resistance. Above this, the level of 11550, followed by 11750, will act as the major resistance, which is 80% of the symmetric triangle pattern target in the medium term. 

Nifty has been making higher highs in daily trading sessions, except for a one-day breather in-between. 

However, the upside in the prices is accompanied with relatively falling volumes and the 14-period RSI hitting above 75. In case Nifty turns back from the current levels, we hold 11260-11200 as the immediate supports, followed by 11145-11095. The level of 10925 will act as the trend reversal in this case.

STOCK RECOMMENDATIONS

BBTC LTD............... BUY............ CMP Rs 1567.15

BSE Code : 501425
Target 1 .. Rs 1657
Target 2 ..... Rs 1714
Stoploss....Rs 1460(CLS) 

The stock of BBTC is currently trading at Rs 1567.15. Its 52-week high and low stand at Rs 1820/Rs 847 made on January 10, 2018 and August 4, 2017, respectively. Considering the weekly time frame, the stock fell nearly 40% up to Rs 1082 on March-end and hit a bullish piercing pattern, which indicated a bounce-back. Accordingly, the stock rose above 61.8% retracement till Rs 1654-1657 levels. It also gave correction in-between 38.2% and 50% retracement of the bounce, where it witnessed a double bottom at Rs 1382 level, which was just above its 200-day EMA support level. Considering the daily time frame, the stock is currently trailing at Rs 1575-1545 resistance zone. Moreover, it has given a kind of symmetric triangle pattern breakout at Rs 1512 on a closing basis. The volumes are justifiable and the 14-period RSI is quoting at 59, which suggests momentum going forward. The stock is trading above its Bollinger band average and is heading the upper band, which is placed at Rs 1581. We recommend a BUY. 

INDIAN BANK ............. BUY............ CMP Rs 358.20

BSE Code : 532814
Target 1 ..... Rs 385
Target 2 ..... Rs 398
Stoploss....Rs 329 (CLS)




The stock of Indian Bank is currently trading at Rs 358.20. Its 52-week high/low stand at Rs 428/Rs 254, which were made as on November 17, 2017 and September 28, 2017, respectively. Considering the monthly time frame, the stock had given a sharp rise of 67% in October and November 2017, and a sharp fall of 37% from November to March 2018. The stock has bounced back and is trailing at 61.8% of the fall since last two months. Considering the weekly time frame, the stock has been taking support at multiple point upward trendline since November 2016. It recently took a support at Rs 305 level in the July 27 week and bounced back sharply. With this bounce, the stock also gave rounding base and a downward sloping trendline breakout at Rs 353 on a closing basis. Considering the daily time frame, the stock has given a kind of cup and handle pattern breakout at Rs 364 and is trailing near the levels. The volumes are reasonable and the 14-period RSI is quoting at 59, suggesting momentum. We recommend a BUY.