Nifty Index Chart Analysis

Indian stock markets surpassed Dollar 2 Trillion market capitalisation with an uninterrupted buying by both domestic and foreign investors. Markets corrected from their all-time high levels led by the political chaos that hit the US markets and thereby other global bourses. Donald Trump’s protectionist stance remains a matter of concern for the Indian markets, while his ability to fructify concerned reforms is still questionable to the investors throughout. On the domestic front too, the subdued macro-economic inflation and industrial output data coupled with the corporate earnings data brought about some correction in the markets. All-in-all, Nifty witnessed a correction after hitting consecutive 2 all-time highs amid profit booking. However, GST rates are out and the tax brackets have buoyed various items that kept further correction on hold.

 Considering the daily time frame, Nifty corrected giving a gap-down opening on May 18, attempted to recover for  gap-filling, but posted a turnaround yet again to close in red. The next two sessions too traded with a negative bias in intraday trades, but witnessed consolidation on daily basis with rising volumes. This depicted some distribution at the peak levels. The 14-period RSI  has come down from over-bought zone and is quoting at 61. Hence, in case  Nifty continues with some more distribution, we hold 9390 as the immediate support followed by 9370 levels which is a resistance turned support. 9270 will act as the major support level. On the contrary, for any rise from the current levels, we hold 9505-9530 as the immediate resistance for Nifty.

 Considering a medium-term view on the weekly charts, post a rally from April All-in-all, we maintain our view of  an uptrend to continue in the markets, till Nifty doesn’t breach 9020-8990  levels on the downside. And our long-term view is bullish on the Nifty where we see it heading 10700-11200 mark. For now, we still have some  period left for the corporate earnings  and hence we see Nifty to remain  volatile with the release of frontline stocks results.

STOCK RECOMMENDATIONS

VA TECH WABAG

BSE Code : 533269 Buy CMP : Rs.675
TGT 1 : Rs.737 TGT 2 : Rs.767
SL: Rs.610 (CLS)

The stock of Va Tech Wabag is currently trading  at Rs.675. Its 52-week high/low stands at  Rs.736.85 / Rs.449.95 and have been made on March 27, 2017 and December 23, 2016. Considering the daily time frame, the stock has been trading in consolidation after consecutive three days of sharp rally during the last half of March, 2017. With this, the stock has formed a symmetric triangle and recently gave a breakout at 680 level with reasonably higher volumes. The 14-period RSI is quoting at 60, plus RSI and Stochastic has given a positive crossover, which suggests good momentum in the stock. Moreover, considering the weekly time frame, the stock has given a prolonged pennant pattern breakout in the recent weekly candle. Thereby, we recommend BUY in the stock for a target of Rs. 737-767.  We maintain a stop loss at Rs.610.

WELSPUN CORP

BSE Code : 532144 Buy CMP : Rs.84.35
TGT 1 : Rs.92 TGT 2 : Rs.97
SL: Rs.79 (CLS)

The stock of Welspun Corp is currently trading at Rs.84.35. Its 52 week high and low stands at Rs.102.31 and Rs.56 respectively which have been made on May 20, 2016 and November 09, 2016. Considering the daily time frame, the stock has been resisting itself at Rs.90.7-91 levels since July 2016. Recently, the stock gave a breakout at these levels with high volumes and is witnessing a pullback for now. The stock may give a reversal from the current levels or after a correction of up to 88 levels. The stock has been trading in a downtrend since August 2015 and has just given a reversal. We thereby, suggest a BUY in the stock at current levels up to 88, for a target of Rs.92 followed by  Rs.97, with a stop loss of Rs.79.