Technicals

WHAT LIES AHEAD: NEAR-TERM PICTURE



SPOT NIFTY: Indian benchmark indices were off their peak levels amid August F&O expiry as the high weightage stocks witnessed profit- booking. On the macroeconomic front, the Indian rupee depreciating to its all-time low of 70.85 with a bounce back in the Brent oil above USD 77.76 level spread some cautiousness in the markets. A range-bound volatility is expected to continue in the near term with the release of macroeconomic numbers, which may influence RBI's decision in the upcoming policy meet.

On the broader front, Mid-cap and Small-cap indices outperformed the benchmark indices and surged more than 1% each. The metal sector, which had surged more than 7% in the last five trading sessions, became market saviour and refrained the indices from correcting. Power sector followed suit and surged 3.8%.

Technically, Nifty hit a Doji at all-time high levels on August 28 and thereby witnessed some correction in the next two trading sessions. However, talking about the near term, Nifty took support at 50% retracement of the prior short rally from 11532 to 11760 and bounced back a little. Hence, if the bounce continues, we hold 11700-11760 as the resistances, followed by 11840. However, if some more profit-booking continues and Nifty turns southward again, we hold 11620 followed by 11530 as the supports, if 11640 is breached on a closing basis.

NIFTY DERIVATIVES: The Indian Volatility Index (VIX), a gauge for market's short term expectation of volatility, witnessed modest decline of 0.24 per cent to 12.41. Nifty September 2018 future last price stood at 11,739.50 at a premium of 62.70 points over the spot closing of 11,676.80. Nifty October 2018 future last price stood at 11,769.95 at a premium of 93.15 point over spot closing of 11,676.80. The Nifty Put-Call Ratio (PCR) Open Interest-wise stood at 1.16 for September month contract. Among Nifty calls, 11,800 Strike Price from the September month expiry was the most active Call. Among Nifty Puts, 11,700 Strike Price from the September month expiry was the most active Put. For the September series, the maximum OI outstanding for Puts was at 11,000 strike price and that for Calls, it was at 11,800 strike price.

LEGEND :

EMA - Exponential Moving Average
MACD - Moving Average Convergence Divergence
RSI - Relative Strength Index

STOCK STRATEGY

INDIA CEMENTS ............... BUY ............... CMP Rs.125.75

BSE Code: 530005
Target 1: Rs.133 Target 2: Rs.135
Stoploss: Rs.117 (CLS)



Current Observation: The stock had faced strong resistance around the levels of Rs 122.5-124.5 since the second week of June 2018.

Presently, the stock has managed to give a breakout of horizontal trendline along with robust volumes.

The stock is trading above its important short term moving average, i.e. 21-day EMA.

The RSI on the daily chart is in a rising trajectory and trading in bullish territory.

Daily MACD is bullish as it is trading above its signal line.

The level of Rs 117 is likely to act as a strong support for the stock and this can be maintained as a stop loss.

On the upside, the stock is likely to touch the levels of Rs 133-135.

Conclusion: We expect the stock to continue with its upmove and head towards Rs 133-135 in the short-medium term. Traders can keep a stop loss of Rs 117 for this trade.

REVIEW OF STOCK STRATEGY

We had recommended our readers to buy the stock of Adani Ports and Special Economic Zone Ltd at Rs 383.80 in issue no. 45 (dated Aug 27, 2018). Post our recommendation, the stock witnessed high volatility and, thereafter, it moved high to touch the level of Rs 393.30. We advised our readers to book full profit in the stock at the level of Rs 389.60 through our SMS service on August 29, 2018. We hope all our readers have benefited from this recommendation.