DSIJ Mindshare

NIFTY Index Chart Analysis

The bull-bear fight is still on in the Indian markets which has resulted in consolidation in the overbought zone with high valuations. The month of June 2017 ended on a weaker note in the wake of F&O expiry and cautiousness ahead of GST implementation. Moreover, markets also took weak global cues pertaining to fall in crude oil prices despite production cut by OPEC. Moreover, the Ransomware software attacks in Europe majorly added to the negative sentiments across the globe. However, some short covering in the markets was seen in the recent sessions, driven by positive macroeconomic data. The Eight Core Industries (ECI) figure in May 2017 grew 3.6 per cent over the previous month. The fiscal deficit target for May 2017 reached Rs 37.3 lakh crore to 68.3% of the FY18 target, while the eternal debt narrowed by 2.1 per cent to USD 471.9 billion for March end 2017. All-in-all, the sideways movement is still on with daily volatility in the markets.

Considering the daily time frame, Nifty gave an upward sloping trendline breakdown at 9600, which was exactly the breakdown of the 21-day EMA support level also. In the recent three candles,market has attempted a pullback up to the 9650 level, which is near to the trendline level of 9660. Considering this, we may see fresh buying emerging only after 9630-9650 levels on the Nifty are tested on a closing basis, while Nifty would see a continuation in the positive trend above the 9700-mark. For now, we hold 9660-9700 as the immediate resistances for the Nifty above 9630- 9650. On the downside, which is most likely, we hold 9570-9550 level, followed by 9525 as immediate supports, provided Nifty falls below the 9600-mark.

Considering the weekly time frame, if the low of level 9449 is not broken on a closing basis, we can consider it as a swing low and can await a bounce back in the Nifty. The 14-period RSI has given a positive reversal (though in the overbought zone), which may lift Nifty some more. Above the levels of 9700- 9710, the index may scale up to the level of 9750, hence we maintain our view of 9930-9990 levels in the medium term. However, in case of a turnaround and if Nifty plunges below the 9480 level, the level of 9340 may be tested.

All-in-all, a correction would be taken as an opportunity to accumulate at lower levels. A correction would give a better push to a further upside rally, which is expected to take Nifty to 10700-11200 levels. However, the FIIs and DIIs have started pouring in yet again, and hence, we may see a reversal from the current levels itself. The focus point still remains the GST implementation and how investors would react to it on product/service specific front. Favourable monsoon is another event that would create demand and thereby boost the markets.

STOCK RECOMMENDATIONS  

DABUR INDIA ....................... BUY .............................. CMP Rs293.50
BSE Code : 500096 Target 1 ..... Rs310 | Target 2 ..... Rs320 | Stoploss....Rs282 (CLS) 

The stock of Dabur India is currently trading at Rs293.50. Its 52-week high/low stand at Rs320.30/ Rs258.80 which were made as on July 14, 2016 and December 26, 2016. Considering the daily time frame, the stock recently gave a multiple resistance breakout at Rs296 level with justifiable volumes and witnessed a pullback on the same day. The stock has been making higher tops and higher bottoms with reversals taking supports at 50% or 61.8% retracement levels. Hence, we may see the stock correcting some more up to Rs291/289 levels and bouncing back for yet another rally. The 14-period RSI is quoting at 68, which depicts good momentum in the stock. Considering the weekly time frame, the stock has been trading in the range of Rs266-296, hence if it sustains above Rs296, it may give an upside move of 25-30 points. We recommend Buy in the stock from Rs291-294, for a target of Rs310-320 with a stop loss of Rs282.

JMC PROJECTS (INDIA) ....................... BUY ................ CMP Rs298.35
BSE Code : 522263 Target 1 ..... Rs325 | Target 2 ..... Rs333 | Stoploss....Rs279(CLS)

The stock of JMC Projects is currently trading at Rs298.35. Its 52-week high and low stand at Rs309.95/Rs183 made on July 4, 2017 and November 21, 2016. Considering the daily time frame, the stock recently gave a descending triangle breakout with huge volumes and RSI positive crossover. Also, on the weekly time frame, the stock has given a multiple resistance breakout at around Rs295 level yet again after a throwback of up to 61.8% retracement level of the prior upward rally followed by a consolidation. The reversal was also supported by 21-day EMA at Rs256 level. The breakout was supported by huge volumes formed after mid-February 2017. Moreover, the 14-period RSI is quoting at 64 with a positive crossover. Hence, we suggest a buy in the stock from Rs298-300 for a target of Rs325-333 and a stop loss of Rs279.

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