By Rahul Shah
Markets back in the grips of long-awaited bulls, Equity benchmark index posted its best weekly advance since April as decline in commodity prices eased some concerns of higher inflation and tighter monetary policy measures. Sensex gained 3% or 1574 points to close at 54482 while Nifty surged by 469 points to close at 16221 against the previous week. Banking, finance, FMCG and Realty stocks were major gainers this week. The recovery in Nifty (gained 7%) from their recent lows indicates the resilience of the markets and its potential to scale higher under a favorable macro construct. The present rally is driven partly by expectations that given the steady decline in commodity prices inflation will start showing a declining trend enabling central banks to go a bit slow on hiking rates, and partly by short covering.
Nifty index on weekly frame, has formed a Bullish candle and has been making higher lows from the last three weeks. Now it has to hold above 16161 for an up move towards 16350 and 16500 zones whereas on the downside support is intact at 16061 and 15888 zones.
Tata SteelTarget: Rs 960 | Stop loss: Rs 860
Tata Steel has formed a base around 850 zone and has given a breakout of the consolidation zone. It has formed a bullish candle on the daily scale and there was buying interest visible at lower levels across the metals sector. RSI oscillator is positively placed on daily and weekly charts indicating positive move ahead. • Considering the current chart structure, we advise traders to buy the stock for an up move towards 960 with a stop loss of 860
Eicher MotorTarget: Rs 3,050 | Stop loss: Rs 2,850
Eicher Motors has retested the breakout and started the fresh move on the upside. It has formed a bullish candle on the daily scale and is trading above its 20 DEMA indicating buying interest. There is strong momentum across the auto space which will take the prices upwards. RSI oscillator is positively placed on daily and weekly charts and supports are gradually shifting higher. • Considering the current chart structure, we advise traders to buy the stock for an up move towards 3050 with a stop loss of 2850.
(Rahul Shah is a Senior Vice President, Group Advisory Leader-PCG, Broking & Distribution, Motilal Oswal Financial Services. Views expressed are the author’s own. Please consult your financial advisor before investing.)