Trade Setup For April 16: Nifty, Sensex Lacking Momentum At Higher Zones
Given the global uncertainty, the near-term momentum will be more influenced by the news flows, says Ruchit Jain of 5paisa.com.
The NSE Nifty 50 has formed a bearish candle on the daily frame with a longer upper shadow indicating momentum missing at higher zones. Now, till the index holds below the 22,300 zone, weakness could be seen towards 22,150-22,050, according to Chandan Taparia, head of technical and derivatives research at Motilal Oswal Financial Services.
The Nifty Bank formed a bearish candle on the daily scale as selling pressure was seen in banking stocks, Taparia said. "Index has started to form lower highs-lower lows on daily scale and has corrected nearly 1,200 points in the last few days." Till it holds below the 48,000 zone, some weakness could be seen towards 47,500, then 47,250 zones.
On the options front, call writing is seen at 22,500, then 22,400 strike, while put writing is seen at 22,000, then 22,200 strike. "Option data suggests a broader trading range in between 21,800 and 22,800 zones, while an immediate trading range in between 22,000 and 22,600 zones."
Given the global uncertainty, the near-term momentum would be more influenced by the news flows and the global markets movement, according to Ruchit Jain, lead of research at 5paisa.com. "Traders should prefer to stay light on trading positions and be very selective in stock-specific trades."
The GIFT Nifty was trading 16.5 points or 0.07% down at 22,233.50 as of 06:31 a.m.
FII And DII Activity
Overseas investors remained net sellers on Monday for the second consecutive session. Foreign portfolio investors offloaded stocks worth Rs 3,268 crore.
Domestic institutional investors remained net buyers for the fifth session and mopped up equities worth Rs 4,762.9 crore, the NSE data showed.
Markets On Monday
India's benchmark equity indices fell for the second straight session to their lowest close in April as investors sold riskier assets due to uncertainty over the Middle East and caution over quarterly earnings.
The Nifty closed 246.90 points or 1.10% lower at 22,272.50, and the Sensex fell 845.12 points, or 1.14%, to end at 73,399.78. Shares of HDFC Bank Ltd., ICICI Bank Ltd., Larsen & Toubro Ltd., Infosys Ltd. and Tata Consultancy Services Ltd. weighed on the Nifty. Those of Oil & Natural Gas Corp., Hindalco Industries Ltd., Maruti Suzuki India Ltd., Bharti Airtel Ltd. and Nestle India Ltd. cushioned the fall.
All the NSE sectors ended lower, except Nifty Oil & Gas. Broader markets were trading lower on the BSE. The S&P BSE Midcap index settled 1.50% lower, and the S&P BSE Smallcap index ended 1.54% down.
Market breadth was skewed in favour of the sellers as 2,984 stocks declined, 917 rose and 148 remained unchanged on the BSE.
Major Stocks In News
Jio Financial Services: The company announced the formation of a 50:50 joint venture with BlackRock and BlackRock Advisors Singapore to undertake wealth management business in India. It will also incorporate a wealth management company and a brokerage company in India.
Adani Energy Solutions: The company’s transmission and smart metering business saw system availability of 99.6% in Q4 and added 174 km to the operational network during the quarter. The company’s distribution loss remained low at 5.09% in Q4 and maintained a supply reliability of more than 99.9%.
TCS: The company announced a new delivery centre in Brazil to transform their technology, with a focus on strategic areas, such as digital transformation, artificial intelligence and cognitive business operations.
Top Brokerage Calls
Motilal Oswal On Cello World
The brokerage reiterates 'buy' rating with a target price of Rs 1,100 apiece, implying a potential upside of 34% from the previous close.
The consumer glassware segment is a key growth driver on import substitution.
Expects a narrowing gap between La Opala and Cello on capacity ramp-up.
Only large, branded player expanding in soda lime glassware vs borosilicate glassware.
Estimates CAGR of 18%/23%/25% in revenue/Ebitda/profit after tax over FY23-26.
Global Cues
Stocks in the Asia-Pacific region extended losses on Tuesday, tracking its Wall Street peer as the latest sales data reinforced that the Federal Reserve will be in no rush to cut rates. Meanwhile, traders are awaiting a slew of economic data from China, including GDP, retail sales.
The Nikkei 225 was trading 675.92 points or 1.72% lower at 38,556.88, and the S&P/ASX 200 was trading 95.80 points or 1.24% down at 7,656.70 as of 06:27 a.m.
The S&P 500 Index and the Nasdaq Composite settled 1.20% and 1.79% lower, respectively, as of Monday. The Dow Jones Industrial Average declined 0.65%. Big tech stocks dragged the U.S. index on Monday, while solid retail sales spurred bets the Federal Reserve will be in no rush to cut interest rates.
Brent crude was trading 0.51% higher at $90.61 a barrel. Gold was higher by 0.07% at $2,385.02 an ounce.
Rupee Update
The Indian rupee closed weaker on Monday as the US Dollar Index remained strong and amid the geopolitical tensions in the Middle East.
The local currency weakened 3 paise to close at Rs 83.45 against the US dollar. It had closed at Rs 83.42 a dollar on Friday, according to Bloomberg data.
