NIFTY Index Chart Analysis

Soon after Moody’s upgraded its rating on India, the international rating agencies S&P and Fitch lowered their outlook on India for FY18. The opportunity was grabbed by the bears and thereby Indian benchmark indices witnessed a downfall for 5 consecutive trading sessions after Nifty almost hit a double top at 10,409 level. Apart from this, the two-day RBI policy review starting December 6 brought in some cautiousness amongst investors as the RBI is likely to defer rate cut on concerns of growing inflation. Though the increase in inflation has been below expectations at 3.58%, it has neared the RBI’s target rate of 4% which would be a great concern and thereby derail RBI’s anticipated rate cut in December 2017. 

The RBI review would be followed by the US Fed's policy review which is expected to announce a rate hike followed by three more hikes in 2018. Further, India’s manufacturing PMI rose to 13-month high at 52.6, offsetting the de-growth in service PMI that fell to 50.3 in November amid slowdown in business activityAll-in-all, with the series of events and the Gujarat elections at the doorstep, Indian stock markets have been in the doldrums since November 6. 

Technically, considering the daily time frame, Nifty has witnessed lower top and a lower bottom after hitting its all-time high at 10,490 on November 6. 

Thereafter, Nifty witnessed correction up to 50% of the prior upward rally from 9,687 to 10,490. Nifty had attempted a reversal, but it consolidated near 10,409 level and yet again witnessed a sharp fall, tumbling below its major multiple supports at 10120 levels. However, with relatively decelerating volumes and 14-period RSI nearing oversold-zone, we may see some short covering at current levels as Nifty has sustained above Technicals 10089-10090 levels forming a Doji on daily chart on December 05. With this we hold 10150-10200 as immediate resistances followed by 10240-10280 levels. In the medium term, 10,410 would be a trend reversal and Nifty may head for a new all-time high thereafter. However, if Nifty continues with a downbeat from here, we hold 9,9959,955 as immediate supports below 10,090-10,070. The level of 9,687 will act as the crucial support, below which Nifty may turn into a bearish phase. 

The results season has almost ended and traders can remain stock-specific knowing the direction in each trading session, as markets may remain less volatile. Investors can enter the markets and get investments at a discount after a support is assured

KESORAM INDUSTRIES ........... BUY ......... CMP Rs146.75 
BSE Code : 502937 Target 1 ..... Rs159 | Target 2 ..... Rs163 | Stoploss....Rs134(CLS) 

The stock of Kesoram Industries is currently trading at Rs146.15. Its 52-week high/low stand at Rs173.40/ Rs117.95, which were made on April 24, 2017 and December 27, 2016, respectively. The stock is in a consolidation mode since September 2011 considering the monthly time frame. It had attempted a breakout in October 2016 but could not sustain and retreated back to the consolidation levels. The December month, however, has been positive for the stock at the start itself with volumes higher than the average of the last five months and with positive RSI crossover. Considering the daily time frame, the stock has given a multiple point downward sloping trendline breakout at Rs144.50 level on December 4. The stock witnessed a pullback on the same day and retreated below the trendline level. However, the stock broke out yet again on December 5 on a closing basis with huge volumes. With this we suggest a BUY in the stock. 

DEN NETWORKS ......... BUY ............. CMP Rs105.55 
BSE Code : 533137 Target 1 ....Rs115 | Target 2 ...Rs119 | Stoploss....Rs96 (CLS) 

The stock of Den Networks is currently trading at Rs105.35. Its 52-week high and low stand at Rs108.50/Rs62 made on December 1, 2017 and December 8, 2016, respectively, depicting a gradual upmove. Considering the daily time frame, the stock has give an ascending triangle breakout at Rs105 level. The stock had witnessed multiple resistances at Rs105 level since January 2016. The stock broke out on December 1, witnessed a pullback for two sessions on December 1 and 4. The stock recovered the losses of two days in a single day on December 5 and has breached the horizontal trendline yet again with huge volumes and the 14-period RSI positive crossover quoting at 69 level. The stock has also witnessed an upper Bollinger Band breakout at Rs98.90 level on a closing basis on the previous weekly candle. With this, we suggest a BUY in the stock at CMP.