NIFTY Index Chart Analysis
The economic posturing by the US President Donald Trump has left the markets in doldrums. The protectionist policies proposed by Trump, specifically in metal and auto industries, followed by tough trade calls, spread pessimism across the globe. Markets took a breather in-between, assuaged by better-than-expected US jobs data. Moreover, the slower than expected rise in consumer prices, i.e., muted inflation, too brought in short covering in the markets. However, markets remained cautious ahead of retail sales data in the US.
On the domestic front, the government announced that it is looking at consolidation, followed by privatisation of the PSU banks, which led to a sharp fall in the PSU banks and, consequently, the benchmark indices. However, the encouraging macroeconomic numbers have helped the markets sustain above their crucial supports levels for now. The decline in retail inflation to 3.38% from 4.58% in the previous month and with the factory output at 7.5% led by higher manufacturing activity cued revival in the Indian economy. Apart from all these events, the sectoral news-based Roadmap movements drove the frontliners and, thereby, the markets. The broader markets have outperformed the benchmark indices last week.
Technically, the major benchmark index, Nifty, has made a new lower top and lower bottom, after it broke its major support at 10300-10275. The index was resisting at 38.2% retracement of the prior downward rally from its all-time high. However, after attempting multiple times, the index retreated and plunged below its lower range of 10300-10275. Further, Nifty hit a kind of double bottom at 10141-10146 levels and bounced back up to 61.8% retracement of the downward rally on a closing basis. Recently, Nifty yet again attempted a bounce back after retracing at 38.2% of the prior upward rally from 10141 levels. From March 12 to 14, Nifty has closed above its 100-day EMA resistance level. Further, the rising volumes, along with the rise from 10141 level, suggests some more upside in the coming sessions. However, oscillators such as RSI and Stochastics trailing below 50 cued lack of momentum in the markets.
Going forward, if Nifty continues to bounce northwards, we hold 10480 followed by 10525 as immediate resistances, followed by 10630, which is its major multiple resistance for now. The level of 10630 may also act as the trend reversal for the short term, while the levels of 10700-10735 will act as medium-term resistances. However, if the lower tops and lower bottoms continue, Nifty would retreat from the current levels and we hold 10335-10270 as the immediate supports, followed by 10140. The psychological level of 10,000 will act as a major and deciding support for the Nifty. Pullback of the upward sloping trendline breakdown or fresh buying is a matter of concern
STOCK RECOMMENDATIONS
PIDILITE LTD......BUY.......... CMP Rs903
BSE Code : 500331
Target 1 ..... Rs950
Target 2 ..... Rs971
Stoploss....Rs855(CLS)
The stock of Pidilite Industries is currently trading at Rs903. Its 52-week high/low stand at Rs972/Rs681.55 which were made on December 26, 2017 and March 27, 2017, respectively. The medium term trend of the stock remains positive. Considering the daily time frame, the stock is seen consolidating since mid-January 2018. The stock meanwhile also witnessed multiple resistance at Rs909-910 levels. Recently, the stock has beached its major resistance at Rs910.35. Further, the stock has seen making higher bottoms and the recent support was at 100-day EMA support level, after which the stock bounced back for four consecutive trading sessions. On the weekly time frame too, the stock took support near 50% retracement of the prior upward rally on a closing basis, after hitting its all-time high. It also witnessed 14-period RSI positive crossover and is trailing at 59 with justifiable volumes. We suggest a BUY on the scrip.
TV18 BROADCAST........ BUY...... CMP Rs67.70
BSE Code : 532800
Target 1 ..... Rs72
Target 2 ..... Rs75
Stoploss....Rs63.50 (CLS)
The stock of TV18 Broadcast is currently trading at Rs63.75. Its 52 week high and low stand atRs66.90/ Rs33.15 made on January 16, 2018 and May 24, 2017, respectively. Considering a broader time frame, the stock took support at Rs50 in the second week of February 2018 after it started correcting from mid-January 2018. The support was near to the 50% retracement of the monthly upside rally starting August 2017. The same level on the daily time frame acted as 100-day EMA support level, where the stock initiated a bounce-back. Now the stock has formed 'inverse head & shoulders' pattern which has a neckline level at Rs63.50. The stock is seen attempting a breakout since last three trading sessions, but it has not fallen with the markets. Further, the 14-period RSI at 66 and justifiable volumes suggest momentum going forward. Hence, we suggest a BUY in the scrip.