A morning walk down Dalal Street: Upmove in Nifty should emerge on a close above 11,080

Clearly, there was nervousness on D-Street. The S&P BSE Sensex which hit a record high on Wednesday failed to gain momentum while on the other hand, Nifty closed below 11000 mark for the second consecutive day in a row.

Overall global markets traded lower due a mixed earnings season and global trade concerns. Weakness in domestic currency and uncertainty around No-Trust vote also played its part.

The rupee on Thursday weakened past Rs 69/USD to close at another record low. The rupee ended at 69.05 a dollar, down 0.62�percent from its previous close of 68.62.

The last time the rupee hit an all-time closing low of 68.9413 was on 5 July. It touched an all-time intraday low of 69.0925 on June 28.

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The large part of the nervousness was also on account of No-Trust vote on Friday. Although analysts are not too worried as they feel that government will be able to prove its majority without any hiccups.

The breadth of the market was heavily skewed towards declining stocks with two declining shares for one advancing stock.

It looks like the index is consolidating and getting ready for a big move on either side. On the downside, the bulls managed to defend the swing low of 10,925 thus strengthening the support area of 10925-10890.

Technical outlook continues to be positive with 11078-11100 as a key target area.

On the institutional side, foreign institutional investors sold Rs 315 crore worth of India shares while DIIs bought Rs 470 crore, according to provisional data.

The Big News:

The big news will come from the earnings front. As many as 27 companies will report their numbers for June quarter which include names like Bajaj Auto, Wipro, CEAT, Bata India, Havells India, Just Dial, and MCX.

Bajaj Auto: PAT likely to grow by 32�percent YoY to Rs 1257 crore

Wipro: PAT likely to fall by 1.7 percent YoY to Rs 2040 crore

CEAT: PAT likely to stand at Rs 84.3 crore

Havells India: PAT likely to grow by 73 percent YoY to Rs 210 crore

MCX: PAT likely to grow by 42 percent to Rs 211 crore

Technical Outlook:

Nifty formed a bearish candle on the daily charts

The current range bound trade indicated that the market eagerly awaits more corporate earnings data to get direction on either side by breaking the range of 10,925-11,080 levels, experts said.

A breach below 10,900 may drag the index down by around 150 points, contrary to this, upmove shall emerge on a close above 11,080.

Traders for time being are advised to remain neutral and initiate positions in the direction of the breakout once it occurs.

Three levels: 10900, 11080, 11171

Max Call OI: 11000, 11100

Max Put OI: 10800, 11000

Stocks with high delivery percentage: Eicher Motors, Dabur, Tata Chemicals

35 stocks saw long buildup: OBC, Reliance Power, Torrent Power, Just Dial

68 stocks saw a short build-up: Hindalco, HCC, Chola Fin, NHPC

Stocks in news:

IOC, BPCL, Adani top bidders for city gas licences

Bharat Gas Resources Ltd, a unit of Bharat Petroleum Corp Ltd (BPCL), bid for as many as 53 cities while state-owned gas utility GAIL India Ltd's retailing arm, GAIL Gas Ltd, put in offers for 34 cities.

Bajaj Finserv posted a 41.2 percent year-on-year (YoY) increase in its first-quarter consolidated net profit at Rs 825.77 crore. The profit was Rs 584.53 crore in the same period a year ago.

Novartis AG agreed to buy the rights to a skin-disease drug from developers Galapagos NV and MorphoSys AG in a deal that could reach $1 billion as Chief Executive Officer Vas Narasimhan centers the Swiss drugmaker on developing innovative prescription medicines, Livemint said.

Technical Recommendations:

We spoke to Epic Research and here��s what they have to recommend:

ITC: Buy | Target: Rs 280 | Stop loss: Rs 267

Titan Company: Buy | Target: Rs 900 | Stop loss: Rs 840

Apollo Tyres: Sell | Target: Rs 265 | Stop loss: Rs 290

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. First Published on Jul 20, 2018 06:53 am