NIFTY Index Chart Analysis

Nifty climbs at snails pace sans momentum 

Nifty has rallied almost 450 points from March low of 9950, its major support level. Both FIIs and DIIs are seen pouring funds into the Indian equities, though at lower volume and at slower pace. The FIIs have yet again returned to the emerging economies after the world’s two largest economies got embroiled in a tariff trade war. China retaliation against Donald Trump imposition of tariffs on two metals with tariffs on 106 US products worth 50 billion dollars has dampened market sentiments, but the possibility of negotiations between the two countries refrained the markets from slumping. 

The DIIs turned to the markets again after the sell-off from the HNIs seemed to have got over with the easing of LTCG tax apprehensions. Further, better than expected auto sales numbers for March month and the financial year lifted up stocks of the auto majors and thereby the markets. RBI kept the interest rates unchanged, notwithstanding the high inflation. However, Nikkei Manufacturing PMI recorded a fivemonth low at 51 amid slowdown in order inflows and overall business. On the contrary, the Services PMI increased to 50.3, which is above the minimum expansion level of 50. The growth was on the back of greater inflows from New York, leading to an increase in the staff at the fastest pace in the last seven years. 

Going forward, we have Q4FY18 corporate earnings at the doorstep, which will drive the markets in the coming sessions. Further, the monsoon, which is expected to be normal at 100% of the long-period average of 87 cm, will add to the positive sentiments if the corporate earnings depict revival and global geopolitics maintains the status quo, if not improvement. 

Technically, after bouncing back from 9950 levels, Nifty witnessed a reversal, may be in the form of a pullback. Nifty resisted at 10200-10250 levels from where it was expected to retreat. However, after consolidating at those levels for a few sessions, Nifty broke out of the levels, taking major support at the 200-day EMA level. The upside is not supported by momentum, where the volumes have been relatively lower than those witnessed during the downfall and the 14-period RSI too is lying at 55 level, though it has given a breakout at 48. Nifty is giving gradual upside because of very less momentum in the frontline stocks. 

In case Nifty continues to take baby steps northwards, we hold 10475-10500 as immediate resistances, above which Nifty holds the potential to touch our major trend reversal level of 10630, followed by yet another crucial level of 10705, which is the 61.8% retracement of the weekly downward rally from the all-time high to double bottom at 9950-9960. However, post the volatile session on April 10, if Nifty retreats, we hold 10245-10250 as the resistance-turned-support level for the index, provided that 10315 is breached on the downside. Further, 10180-10130 will act as supports 

STOCK RECOMMENDATIONS 

GENESYS LTD .......BUY ...... CMP Rs 305 

BSE Code : 506109
Target 1 ..... Rs 339
Target 2 ..... Rs 345
Stoploss....Rs 276(CLS) 

The stock of Genesys International Corporation is currently trading at Rs 305. Its 52-week high and low stand at Rs 390/Rs 144.90 made on October 11, 2017 and May 23, 2017, respectively. After hitting a kind of double top on October 11 and November 27, 2017, at Rs 388-390 levels, which is also the all-time high level, the stock traded with lower tops. With this, the stock has formed a downward sloping channel pattern on the daily time frame, except for a false downward move from February 2-7. Recently, on April 5, the stock gave a pattern breakout at the Rs 278 level. Thereafter, the stock surged and is now consolidating just above its immediate resistance at Rs 306 level. The volumes are justifiable and rhe 14-period RSI is quoting at 67, which suggests that the momentum will continue. On the weekly time frame, the current week is the third consecutive uptick and the uptick will confirm if the stock sustains at Rs 309 on a closing basis. 

INDIAN HOTELS LTD ..........BUY ......CMP Rs 137 

BSE Code : 500850
Target 1 ..... Rs 147
Target 2 ..... Rs 155
Stoploss....Rs 125 (CLS) 

The stock of Indian Hotels is currently trading at Rs 137. Its 52-week high/low stand at Rs 160.60/Rs 101.42, which were made as on July 21, 2016 and December 27, 2016, respectively. Considering the weekly time frame, the stock, after hitting its 52-week high, tumbled sharply up to 61.8% retracement of the prior upward rally. The stock has been giving a range-bound movement thereafter between its 38.2% and 61.8% retracements at Rs 125-139 levels. The Rs 125 level also acted as the 200-day EMA support for the stock. Considering the daily time frame, the stock bounced back from March 26 after taking major support at Rs 125-mark and surged up to Rs 141-142 level, which is its multiple resistance level. The stock is trailing at the 38.2% retracement of the prior rally from Rs 125. It has also formed a kind of inverse head & shoulders pattern with neckline at Rs 141-142 levels.