Analyst Name: Dharmesh Shah – Head Technical
The weekly price action formed a strong bull candle as buying demand emerged from the vicinity of the 200 days SMA. Going ahead, we expect the index to sustain above the upper band of recent consolidation (at 11500) and gradually head towards the 11800 in the coming weeks. The Nifty has retraced almost 80% of preceding 19 session’s decline (11794-10790) in just six sessions, at 11590. The ongoing faster pace of retracement signifies robust price structure. Stock specific activity to remain in focus ahead of the Q2FY21 result session. We expect Midcap index to maintain it’s out performance and retest there recent highs, backed by rejuvenating market breadth highlighting strength and durability of ongoing up move.
Analyst Name: Dharmesh Shah – Head Technical
| Stock | Reco. | CMP | Target | Stop Loss | Note |
| Tech Mahindra | Buy | 844 | 910 | 805 | The stock is in secular up trend and is at the cusp of breakout above the previous multiple highs since Feb’19 placed around 840-850 levels |
| Cipla | Buy | 781 | 842 | 748 | Faster retracement on the long-term chart as 20 quarter down leg ((752- 355) was completely retraced in just 2 quarter and MACD in buy mode |
| Dabur India | Buy | 520 | 554 | 499 | Stock at the cusp of breakout above previous nine weeks range as it has rebounded forming a higher base at the 200 days SMA and rising demand line joining lows since March |
F&O Strategy:
Head Derivatives- Raj Deepak Singh
F&O Strategy:
Buy Godrej Consumer Products
CMP: 752
TARGET: 792
STOP LOSS: 725
Rationale:
- In the ongoing volatility of index, stocks specific out performance is evident. While most FMCG stocks witnessed sharp declines recently, Godrej Consumer Products has seen continued buying support and exhibited significant resilience. The stock has significant Call base at 720 strike for the October series where closure of positions were observed suggesting expectations of further upsides.
- Even the futures open interest has remained largely intact in Godrej Consumer Products despite liquidation seen in most of the stocks during September settlement indicating intact long bias. We expect declines in the stock to be limited and current levels provides a good risk reward opportunity.
Buy Aurobindo Pharma
CMP: 843
TARGET: 910
STOP LOSS: 790
Rationale:
- Aurobindo Pharma reverted sharply from its support of near 750 along with the broader market. For the October series, highest Call OI was placed at 820 strike and stock was able to close above these levels. The open interest in these strikes is moving to deep OTM strikes suggesting expectations of further up move in the coming sessions.
- Positions in the stock have moved till 900 strike as well whereas huge writing block was seen in 820 strike, which should provide cushion. We believe that the current leg of short covering will take the stock towards its breakdown levels placed near 900 levels.
Forex Strategy:
Head Derivatives- Raj Deepak Singh
Buy USDINR
Buy USDINR at 73.10 – 73.20
TARGET: 73.70
STOP LOSS: 72.95
Rationale:
- As the Dollar index corrected from recent high and move below 94 levels, INR appreciated almost 80 paisa last week.
- However, it has moved near its sizeable Put base of 73 and we feel bounce can be seen in USDINR from current levels.
| Resistance | 73.50 | 73.60 | 73.70 |
| Support | 73.10 | 73.00 | 72.90 |
Sell EURINR
Sell EURNR at 86.25-86.35
TARGET: 85.20
STOP LOSS: 86.65
Rationale:
- EURUSD failed to hold its important levels of 1.18 and has slipped towards 1.16 on the back of sharp rise in Covid-19 cases.
- Weakening of EUR against all currencies would push EURINR pair lower towards the 85 levels.
| Resistance | 86.45 | 86.65 | 86.65 |
| Support | 86.00 | 85.50 | 85.20 |
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