Positional traders are advised to buy the dips and retain positive stance as long as Nifty50 sustains above 10,900 levels on a closing basis and look for bigger targets over a period of time.
Last week history got created. Sensex recorded a fresh intraday high of 36,740.07 while the Nifty50 reclaimed 11,000 levels. It is still 153 points short of its lifetime high of 11,171.55.
Better than expected results from TCS kicked off the earnings season with optimism; however, Infosys failed to show a similar trend. Even though the market closed flat on Friday, the Nifty50 index recorded a weekly gain of over 2 percent.
The larger trend is still on the upside and the short-term trend will reverse only if Nifty trades below the low of 10,999, which is also a crucial support while resistance is around 11,100-mark.
On the macro front, the government will announce wholesale price inflation (WPI) for June 2018 on Monday, 16 July 2018. WPI rose by 4.43 percent year-on-year in May 2018, after a 3.18 percent rise in the prior month.
On the institutional side, FPI sold shares worth Rs 1104 crore on Friday while DII bought shares worth Rs 872 crore, according to provisional data.
Foreign investors have pulled out nearly Rs 1,200 crore from the debt markets in the first two weeks of the month on higher fuel prices and possibilities of a rate hike by the US Federal Reserve.
The latest sell-off comes after foreign portfolio investors (FPIs) withdrew an amount close to Rs 50,000 crore from the debt markets in last five months (February to July). Prior to that, overseas investors had infused over Rs 8,500 crore in January.
The big news is from the earnings front. The week promises to be action-packed as big corporate earnings will begin to flow. HUL will report its results for the quarter ended June today.
Hindustan Unilever is likely to report a 18.6 percent year-on-year (YoY) increase in its April-June net profit to Rs 1,538 crore, according to a Reuters poll of analysts.
In the first quarter of FY18, the company had posted a net profit of Rs 1,296 crore. In the quarter under review, the Indian subsidiary of the Anglo-Dutch Unilever Plc is seen reporting a 14.73 percent YoY rise in net sales to Rs 9,638 crore.
Brokerages expect the company's volume growth to be in the range of 11-14 percent. HUL had witnessed flat volume growth in the year-ago period because of the disruption in trade channels before the implementation of Goods and Services Tax (GST).
On Friday, software services exporter Infosys started off the year 2018-19 on a mixed note as Q1 bottom line and operational numbers missed analyst estimates while revenue and FY19 guidance met expectations.
Net profit for the June quarter fell 2.1 percent to Rs 3,612 crore compared to Rs 3,690 crore in the previous quarter. Infosys said that the profit was impacted by ongoing negotiations for Panaya, the Israeli software company it put up for sale last quarter.
The board has approved a one bonus share for every share held.
First quarter revenue increased 5.8 percent to Rs 19,128 crore from Rs 18,083 crore in the March quarter.
Technical Chart:
The index formed a bearish candle on the daily charts and a decent bullish candle on the weekly scale.
Flat close with a negative bias indicated that the market took a breather after rallying sharply in the previous session, but managed to hold the psychological 11,000-mark for the second consecutive session which hinted that bulls have not given up yet and may help the index hit an earlier record high of 11,171 seen in January, experts said.
Positional traders are advised to buy the dips and retain positive stance as long as Nifty50 sustains above 10,900 levels on a closing basis and look for bigger targets over a period of time.
Three levels: 10900, 11071, 11171
Technical Recommendations:
We spoke to 5nance.com and here’s what they have to recommend for intraday trading:
Adani Enterprises: Buy | Target: Rs. 146 | Stop loss: Rs 124 | Return: 11%
Prabhat Dairy: Buy | Target: Rs 158 | Stop loss: Rs 135 | Return: 6%
UPL: Sell | Target: Rs 535 | Stop loss: Rs 584 | Return: 5%
Disclaimer: The views and investment tips expressed by investment expert 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.
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