By Rahul Shah
Equity benchmarks logged gains for the week, after two consecutive weeks of decline, amid rising concerns over tapering and volatility in global equities. Sensex and Nifty gained in the first three days of the week (including on the day of union budget 2022). Over the last two sessions, the benchmarks fell, amid rising volatility due to tech selloff in the U.S. (poor quarterly results announced by Facebook) and concerns over hawkish tilt to monetary policy framework by the U.S. Federal Reserve. Nifty climbed up by 414 points (2.4%) to close at 17516 and Sensex advanced 1445 points or 2.5% to close at 58645.
This week, RBI will announce the credit policy on February 10. 10-Year G-Sec Yield has spiked to a nearly 2-year high at 6.88% ahead of RBI credit policy outcome. Market fear the spike in crude prices (above $93/bbl — 7-year high) can not only stoke inflation but also impact the country’s trade and fiscal deficits. BoE hiked interest rate by 25bps this week and the US Fed is likely to announce a hike in interest by next month (March). Surging crude oil prices and their impact on domestic inflation have put the spotlight on possible RBI moves at the meeting of the apex bank’s rate-setting body next week. RBI’s commentary on inflation and economic growth will be key factors to watch amid the hawkish stance from the US Fed. On the earnings front, out of the 34 Nifty 50 companies that have announced results so far, 18 either met or exceeded analyst estimates, 14 missed. Expects Nifty range between 17850 to 17150 (close 17516). Trader focus on interest-sensitive sectors like Auto, banking and Finance, and Realty stocks ahead of RBI policy meeting
Going forward option data suggests a wider range between 17200 to 18000, post-Fridays closing India VIX @18.89 suggest that markets can be volatile. It formed a Bearish candle on daily scale and a Bullish candle with long upper shadow on weekly frame indicating supply at higher level. Now till it holds below 17650 zones, bounce could be sold and weakness may be seen towards 17350 and 17250 whereas hurdles can be seen at 17777 and 17900 zones.
Praj Ind
Target – Rs 460 | Stop-loss – Rs422
Praj Ind has given range breakout on daily scale and holding well above the same. It has also retested Flag breakout on weekly chart and bounced back higher which has bullish implications. RSI oscillator is also positively placed on the daily and weekly scale. Considering the current chart structure, we advise traders to buy the stock for a up move towards 460 with a stop loss of 422.
Godrej Properties
Target – Rs 1650 | Stop-loss – Rs 1430
The stock has been retracing from higher levels and it is currently seen taking support at the lower end of the falling channel It is at the major support zone at 78.6% which comes to 1500 level of the rise from the lows of 1200 to the high of 2600. The momentum indicator which is the Relative strength indicator is reversing from the oversold territory and is expected to support price to move higher Going forward, the zone of 1500-1550 is a strong level to accumulate the stock for higher levels of 1650 -1700.
(Rahul Shah is the Senior Vice President, Group Advisory Leader-PCG, Broking & Distribution at Motilal Oswal Financial Services. Views expressed are the author’s own. Please consult your financial advisor before investing.)