Nifty support is seen at 16450-16400 levels. On holding above this index remains positive in the short term
By Ashish Chaturmohta
Equity markets BSE Sensex and Nifty 50 closed in the positive for the fifth consecutive session on Monday buoyed by softening of oil prices in the last week. Russia- Ukraine war continues to drive the market sentiment. The cooling off in commodity prices has helped markets bounce off its lows. Banks, Financial Services, and IT stocks led the gains in the market while Realty and Commodity related stocks were down. The Nifty closed higher by 1.45% at 16871 levels at the high point of the day. Broader market indices BSE Midcap and Smallcap were up by 0.02% and 0.31% for the day, thus underperforming the benchmark indices. The advance-decline ratio was slightly in favour of declines with a 5:6 ratio.
NSE Nifty 50 has seen a nice bounce back from the low of 15671 hit last week. Now the index is trying to fill the breakdown gap of 24th Feb and reached the 200-day moving average. Thus, 16975-17030 is the resistance zone for the market. Crossing and trading above 17030 on a sustainable basis rally can extend towards 17490 odd levels where the next set of resistances are seen. On the downside, support is seen at 16450-16400 levels. On holding above this index remains positive in the short term. Breaking below the 16400 index is likely to retest of recent low.
The US Federal Reserve will be meeting this week for the first-rate hike since the pandemic which is discounted in the market. But markets will be closely watching the Fed’s statement for its outlook and future rate hikes, given the recent spike in commodity prices due to the Russia-Ukraine war.
Stocks to buy
State Bank of India: SBI has seen a smart bounce back after the fall. It is largely within a broader range of 440 to 545 and turned up from the lower end of the range. It can be bought with a stop loss of 460 for a rally towards the upper end of the range i.e. 545 levels.
Cipla: It has been range bound between 1000 and 850 odd levels for the last 11 months and consolidated its gains. The stock has given a breakout on strong momentum and started a new uptrend. Thus, it can be bought at current levels and dips to 1020 with a stop loss of 980 for the target of 1250.
Mphasis: It is currently trading at the breakout level after consolidating for 7 months. Stock can be bought with a stop loss of 3170 for a target of 3660.
Linde India: It has consolidated between 2950 and 2250 odd levels over the last eight months and formed a base for the next rally. It is trading at breakout levels. It can be bought with a stop loss of 2800 for a target of 3250.
All above stock recommendations with 3-6 months view.
(Ashish Chaturmohta, Director, Equity Research, Sanctum Wealth. Views expressed are the author’s own.)