By Rahul Shah
NSE Nifty 50 and S&P BSE Sensex managed to end last week in positive territory despite highly volatile trading sessions in the short spun this week. Sensex gained 183 points or 0.3% to close at 59,646 while touching a high of 60,411, just less than 2000 points away from the record high (62,245 on October 24, 2021). Nifty advance 0.3% or 60 points to close at 17758. There was selling pressure on the last day on account of weakness in the global markets. Traders were booking profit after the index gained nearly 10% in the previous few sessions amid a bearish trend overseas. A depreciating rupee and geo-political tension dampen the market sentiment. However, there was stock-specific action in the market.
The market is expected to be choppy this week on concern over global market weakness. Slowdown in China economy, geo-political tension, stubbornly hot US inflation and its impact on consumers and businesses may negative impact in the domestic market also. US 10-Year bond yield spiked to nearly 3% from the recent low of 2.50 and US Dollar Index surged to 108 from low of 106 which is a concern in the market, sentiment is positive in the local market due to strong FII buying interest. FIIs were net buyers over Rs 3,000 crore this week and nearly Rs 18,000 crore during the month of August so far. 10% above normal monsoon, impressive quarterly results and better than expected economic data supports the market sentiment fundamentally. However, technical correction may not be ruled out after relentless buying in the last couple of weeks.
Global markets ended lower following a four-week winning streak for the benchmark S&P 500. Nasdaq Composite slipped 2% while Dow Jones managed to end positive. Investors have been closely watching the Federal Reserve for any reaction to shifts in inflation or the economy along with keenly watch US and European countries PMI data. Any sign that inflation is peaking or cooling has given Wall Street hope that the Fed could consider easing up on rate hikes. Comments from the US Fed official James Bullard another big rate increase left investors concerned and urging another 75 basis-point move.
Nifty has formed a Bearish Engulfing on daily scale while a Shooting Star or a Doji on weekly scale which indicates some profit booking declines at higher zones. Now it has to cross and hold above 17777 zones for an up move towards 17888 and 18000 zones whereas support is intact at 17650 and 17550 zones
Target: Rs 250 | Stop loss: Rs 224
Canara Bank has given a breakout of the consolidation and it has formed a strong bullish candle on the daily scale which indicates positive price movement ahead. There is momentum across the PSU Banks which will take the prices higher. RSI oscillator is positively placed on daily and weekly charts indicating strength in the counter. Considering the current chart structure, we advise traders to buy the stock for up move towards 250 with a stop loss of 224.
Target: Rs 445 | Stop loss: Rs 410
Ambuja cement has given a breakout of the consolidation zone and is making higher highs since last 4 trading sessions which indicates that the trend is positive. There is strong momentum across the cement space which will support the price to move higher. RSI oscillator is positively placed on daily and weekly charts indicating strength in the counter. Considering the current chart structure, we advise traders to buy the stock for up move towards 445 with a stop loss of 410.
(Rahul Shah is a Senior Vice President, Group Advisory Leader-PCG, Broking & Distribution, Motilal Oswal Financial Services. The views expressed are the author’s own. Please consult your financial advisor before investing.)