By Jay Thakkar
The August series was very positive for the bulls wherein Nifty was up by more than 5%. In the similar series, Nifty 50 supplied a breakout from its 2 months variety which led to some brief covering plus the aggressive extended constructed-ups. The broader market place nonetheless traded with a unfavorable bias wherein the Nifty bank, Nifty midcap and Nifty modest-cap underperformed the Nifty with a higher margin. The Nifty rollovers are great as it saw 83.98% rollover against the typical of 78.48%. The Banknifty rollover was reduced than the typical as it stood at 79.08% against the typical of 79.41%.
As far as derivatives information is concerned, the FIIs have been net extended each in Index futures as nicely as stock futures in the August Series. In reality, their extended positions improved towards the finish of the series clearly indicating that the brief term trend is positive from FIIs front.
The Pharma and Auto sectors are probably to witness some brief covering in this series whereas IT and Chemicals are probably to see the momentum continuing on the extended side. Hence these are the 4 sectors which one can eye on the extended side, the metal sector can see some profit booking or brief constructed up going ahead in the September series.
Nifty was consolidating inside a variety of 16700-16400 in the last series following a rally, nonetheless, the variety is now broken on the upside which is very positive. The quick assistance now on the reduced side is 16900 levels and till these levels are held the brief term bias remains positive for the target of 17300 levels. Above 17300 levels, the extended target for the Index comes to 17600 levels and this important push now post two consecutive up days can come only with the support of Nifty Bank whose extended-awaited breakout is pending.
The Nifty Bank did close nicely in the positive territory in the last trading session nonetheless the breakout is however to occur in it. On the upside,36500 levels is an quick resistance which when taken off will take the Index to 37200-37500 levels. The assistance on the reduced side is pegged at 36000 levels and beneath that 35500 levels.
Mainly two private sector banks have kept the Nifty Bank below stress so far and they are Kotak Bank and HDFC Bank and if these banks move up from hereon then the all-time higher is quite a lot feasible.
Stock such as Tata Motors, Escorts, Dr. Reddy’s, Divis Laboratories, TCS, HDFC LIFE, MCDOWELL, Bharti Airtel, and HDFC AMC are probably to move up or trade with positive bias.
(Jay Thakkar is the Vice President and Head of Equity Research at Marwadi Shares and Finance Limited. Views expressed are the author’s personal. Please seek advice from your economic advisor ahead of investing.)