Trade Nivesh Small & mid-caps outperform! Nearly 70 stocks rose 10-40% in post-Budget week
Experts feel that if the momentum continues which it should, traders should not get surprised to see record highs in the February series. But, there are key resistance levels which the Nifty50 has to surpass.
A kneejerk reaction on the Budget Day of about 1,000 points on the Sensex and about 300 points on the Nifty50 painted a bleak picture for Indian markets, but bulls bounced back sharply in the following week.
After falling by about 5 percent or 587 points including the Budget Day losses in the week gone, Nifty50 managed to recover 437 points for the week ended February 7. The large action was seen in the broader market space.
The S&P BSE Sensex rose 3.5 percent while the Nifty50 rallied 3.75 percent. The S&P BSE Mid-cap index rose 5.1 percent while the S&P BSE Small-cap index was up 3.4 percent for the week ended February 7.
Experts feel that if the momentum continues which it should, traders should not get surprised to see record highs in the February series. But, there are key resistance levels which the Nifty50 has to surpass.
“We have seen a remarkable week for our market as we saw a v-shaped recovery especially after witnessing a shocker Budget Day. But, we managed to recoup losses and the way we are positioned now, we will not be surprised to see Nifty clock fresh record highs in the current series itself,” Sameet Chavan, Chief Analyst- Technical and Derivatives, Angel Broking.
“The mid and small baskets remain to be the center of attraction. It has recovered in tandem with benchmarks, but from hereon we expect these spaces to outperform,” he said.
There are as many as 68 stocks in the S&P BSE 500 index that rallied 10-40 percent which include names like JSW Steel, Adani Green Energy, GE Power, JM Financial, Bajaj Electrical, Aurobindo Pharma, HEG, V-Mart, Shriram Transport, Honeywell Automation, and Shilpa Medicare etc. among others.
With global markets on a high, the momentum should continue in Indian markets as well, but any escalation of coronavirus concerns could put brakes on global rally.
On the macro front, all eyes will be on the inflation data which will be out in the coming week along with December quarter results from the small and mid-cap space.
More than 1,000 companies will report their results for the quarter ended December from 10 February to 14 February. On the political front, elections results for the Delhi assembly will be watched on February 11.
On the macro front, December IIP and CPI inflation data for January will set the tone for markets on February 12, and WPI data for January will be out on February 14.
On the global front, China's January inflation rate is expected on February 10, US January inflation rate is expected on February 13, US January retail sales is expected on February 14 and EU December Industrial production data is expected on February 12.
"Since the overhang of Budget, RBI and major quarterly corporate results is behind us, the upcoming week could see dilly-dallying of bourses. As the major events are already taken care of, the Street will be largely guided by the global mood which is currently dependent on coronavirus," Umesh Mehta, Head of Research, Samco Securities told Moneycontrol.
"Markets will take time to sink in all the measures taken by the Government to revive the economic engine. Volatility will also subside considerably and certain pockets of stocks will experience profit booking," he said.
How is Nifty placed technically?
The Nifty50 bounced back from its swing low of 11,614 recorded on February 3 to reclaim 12,000 levels. However, it failed to close above 12,100, and 50-Days Moving Average placed at 12,118 on the daily charts.
The Nifty index consolidated in a range of 50 points for the most part of the session and formed a Bearish Candle on the daily scale. But, it formed a bullish candle on a weekly scale.
On the options front, maximum Put OI is at 12,000 followed by 11,500 strikes while Maximum Call OI is at 12,500 followed by 12,400 strikes.
Put writing is seen at 11,600 then 11,800 strikes while Call writing is seen at 12,300 followed by 12,500 strikes. Options data indicates a wider trading range between 11,800 to 12,300 zones.
“If we combine the price action of the last two weeks, we are seeing a Bullish Piercing pattern on the weekly chart. At current juncture, supports are gradually shifting higher and now till the time, it holds above 12,050 level, we may see ongoing optimism towards 12,200 then 12,250 zones; while on the downside, major support is seen at 12,000 then 11,950 zones,” Chandan Taparia, VP Analyst-Derivatives at Motilal Oswal Financial Services told Moneycontrol.
Bank Nifty index moved within the range of February 6 trading session and formed an Inside Bar pattern on the daily chart. While the banking index outperformed the benchmark index on the week-on-week basis and rallied by 4.63 percent to form a Bullish Engulfing pattern on a weekly scale.
“Formation of mentioned pattern around its 50 EMA on weekly chart certainly bodes well for the bulls. At the current juncture, it is sustaining well above the Falling Channel breakout level and 50 DEMA,” said Taparia.
He further added that supports are shifting higher to 31,000-30,800 zone and sustenance above the support zone may lead to an extension in an ongoing move towards 31,500 then 31,750 levels.
Experts feel that if the momentum continues which it should, traders should not get surprised to see record highs in the February series. But, there are key resistance levels which the Nifty50 has to surpass.
A kneejerk reaction on the Budget Day of about 1,000 points on the Sensex and about 300 points on the Nifty50 painted a bleak picture for Indian markets, but bulls bounced back sharply in the following week.
After falling by about 5 percent or 587 points including the Budget Day losses in the week gone, Nifty50 managed to recover 437 points for the week ended February 7. The large action was seen in the broader market space.
The S&P BSE Sensex rose 3.5 percent while the Nifty50 rallied 3.75 percent. The S&P BSE Mid-cap index rose 5.1 percent while the S&P BSE Small-cap index was up 3.4 percent for the week ended February 7.
Experts feel that if the momentum continues which it should, traders should not get surprised to see record highs in the February series. But, there are key resistance levels which the Nifty50 has to surpass.
“We have seen a remarkable week for our market as we saw a v-shaped recovery especially after witnessing a shocker Budget Day. But, we managed to recoup losses and the way we are positioned now, we will not be surprised to see Nifty clock fresh record highs in the current series itself,” Sameet Chavan, Chief Analyst- Technical and Derivatives, Angel Broking.
“The mid and small baskets remain to be the center of attraction. It has recovered in tandem with benchmarks, but from hereon we expect these spaces to outperform,” he said.
There are as many as 68 stocks in the S&P BSE 500 index that rallied 10-40 percent which include names like JSW Steel, Adani Green Energy, GE Power, JM Financial, Bajaj Electrical, Aurobindo Pharma, HEG, V-Mart, Shriram Transport, Honeywell Automation, and Shilpa Medicare etc. among others.
With global markets on a high, the momentum should continue in Indian markets as well, but any escalation of coronavirus concerns could put brakes on global rally.
On the macro front, all eyes will be on the inflation data which will be out in the coming week along with December quarter results from the small and mid-cap space.
More than 1,000 companies will report their results for the quarter ended December from 10 February to 14 February. On the political front, elections results for the Delhi assembly will be watched on February 11.
On the macro front, December IIP and CPI inflation data for January will set the tone for markets on February 12, and WPI data for January will be out on February 14.
On the global front, China's January inflation rate is expected on February 10, US January inflation rate is expected on February 13, US January retail sales is expected on February 14 and EU December Industrial production data is expected on February 12.
"Since the overhang of Budget, RBI and major quarterly corporate results is behind us, the upcoming week could see dilly-dallying of bourses. As the major events are already taken care of, the Street will be largely guided by the global mood which is currently dependent on coronavirus," Umesh Mehta, Head of Research, Samco Securities told Moneycontrol.
"Markets will take time to sink in all the measures taken by the Government to revive the economic engine. Volatility will also subside considerably and certain pockets of stocks will experience profit booking," he said.
How is Nifty placed technically?
The Nifty50 bounced back from its swing low of 11,614 recorded on February 3 to reclaim 12,000 levels. However, it failed to close above 12,100, and 50-Days Moving Average placed at 12,118 on the daily charts.
The Nifty index consolidated in a range of 50 points for the most part of the session and formed a Bearish Candle on the daily scale. But, it formed a bullish candle on a weekly scale.
On the options front, maximum Put OI is at 12,000 followed by 11,500 strikes while Maximum Call OI is at 12,500 followed by 12,400 strikes.
Put writing is seen at 11,600 then 11,800 strikes while Call writing is seen at 12,300 followed by 12,500 strikes. Options data indicates a wider trading range between 11,800 to 12,300 zones.
“If we combine the price action of the last two weeks, we are seeing a Bullish Piercing pattern on the weekly chart. At current juncture, supports are gradually shifting higher and now till the time, it holds above 12,050 level, we may see ongoing optimism towards 12,200 then 12,250 zones; while on the downside, major support is seen at 12,000 then 11,950 zones,” Chandan Taparia, VP Analyst-Derivatives at Motilal Oswal Financial Services told Moneycontrol.
Bank Nifty index moved within the range of February 6 trading session and formed an Inside Bar pattern on the daily chart. While the banking index outperformed the benchmark index on the week-on-week basis and rallied by 4.63 percent to form a Bullish Engulfing pattern on a weekly scale.
“Formation of mentioned pattern around its 50 EMA on weekly chart certainly bodes well for the bulls. At the current juncture, it is sustaining well above the Falling Channel breakout level and 50 DEMA,” said Taparia.
He further added that supports are shifting higher to 31,000-30,800 zone and sustenance above the support zone may lead to an extension in an ongoing move towards 31,500 then 31,750 levels.
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