NIFTY Index Chart Analysis
After corporate earnings of most of the major stocks came to an end, the global cues have driven the Indian markets in the couple of weeks or so
.The US Federal Reserve minutes, which signalled interest rate hike in the coming policy reviews amid persistent economic boom prevailing in the US, dragged the bourses across the globe. To add to it, RBI’s hesitation in reducing interest rates on expectation of high inflation has led to flight of foreign capital from the country. The RBI fears that the increase in oil and food prices amid increase in minimum support price (MSP) for agriculture produce may keep the economy inflated, going forward. Recently, the European Central Bank released minutes of the January meeting, which hinted that the consistently high inflation rate may rein in the monetary stimulus. However, markets recovered from their temporary lows and surged higher in the last couple of sessions as the treasury yields retreated from the four-year high levels. Now, market participants look ahead to the new Federal Reserve chief’s first congressional testimony in the hope of finding clues on the pace of rate hikes.
On the domestic front, Indian benchmark indices had a dreadful February series. But, the start to the March series has been marvellous as bulls tightened their grip on Dalal Street, with Nifty and Sensex recapturing their crucial 10,500 and 34,000 levels. Going ahead, investors will keep an eye on the GDP data for the December quarter due to be announced on Wednesday and Nikkei Indian Manufacturing PMI data, too, are due to be released on Wednesday. Additionally, auto stocks will be in focus as the companies will announce their monthly sales data for February.
Nifty, after registering all-time high of 11,172 in the month of January, entered into a corrective phase and marked a low of 10,276 in the early part of February month, which resulted in correction of about 8 per cent. Thereafter, the index has witnessed a pullback and this pullback rally has been resisted around the levels of 10,630-10,650. On the structural front, Nifty has been forming a double bottom-like pattern. The neckline of the double bottom pattern is placed around the level of 10,650, and a close above 10,650 would confirm the breakout of double bottom formation. This would lead to upmove up to the level of 10,830, which is 61.80 per cent retracement of the down move (11,17210,276). On the other hand, if the level of 10,270-10,300 is broken on the downside, we hold 10075-10000 as the major support levels.
INTERGLOBE AVIATION ......... BUY ......... CMP Rs1334.40
BSE Code : 539448
Target 1 ..... Rs1420
Target 2 ..... Rs1460
Stoploss....Rs1250(CLS)
The stock of Interglobe Aviation is currently trading at Rs1337.45. Its 52 week high/low stand at Rs1357.15/Rs840, which were made as on February 27, 2018 and February 27, 2017, respectively. The stock has witnessed breakout of a long term trendline plotted by joining high of Rs1395 and Rs1347. The breakout was seen along with robust volumes. The stock since mid-August 2017 had faced resistance multiple times in the range of Rs1291-1300, and recently, the price recorded a breakout from this multiple resistance zone. On the daily time frame, the stock is trading above its important short-medium term moving average, i.e. 21-day EMA and 50-day EMA, which bodes well for the short-medium term price structure. Among the oscillators, the weekly RSI is trading in the bullish zone and the weekly RSI line is still below the overbought region. Based on the abovementioned technical observations, we suggest buying this stock for a target price of Rs1420-1460, with stop loss of Rs1250.
GUJARAT AMBUJA EXPORTS ............. BUY .......... CMP Rs268.55
BSE Code : 540115
Target 1 ..... Rs1630
Target 2 ..... Rs1720
Stoploss....Rs1330 (CLS)
The stock of L&T Tech is currently trading at Rs1840.65. Its 52-week high and low stand at Rs1547/ Rs671 made on February 12, 2018 and June 13, 2017 respectively, which depicts an uptrend with recent candle trailing at all-time high levels. The stock has formed a pennant pattern on the daily time frame and gave a breakout of the pattern on February 8. The stock witnessed a pullback where the prices entered the pennant. On February 12, the stock immediately bounced back retesting the pennant breakout. The breakout was supported by volume spurt and the 14-period RSI positive crossover above 60 level suggesting momentum. On the weekly time frame too, the stock witnessed a correction in the weeks of Feb 2 and Feb 9, after a huge upside in the week of January 25. However, the correction was up to 50% retracement level. The current week has witnessed a bounce-back. We thereby recommend a BUY in the stock.
