Mr. Manish Yadav, Head of Research, CapitalAim
The Benchmark Nifty50 started the week with very negative sentiments and opened gap down after U.S. President Donald Trump threatened on Sunday to raise tariffs on $200 billion worth of Chinese goods to 25 percent from 10 percent on Friday this week and if any trade deal is not reached, would "soon" impose tariff on imports of remaining Chinese goods, this prompted investors to do away with their risky assets on Monday. The U.S. also accused China of reneging over the past week on some key commitments it made during the talks. This latest move by U.S. President dented the sentiments of financial markets across the globe and raised worries that trade talks between U.S. & China may be derailed. Still, however, China has sent a delegation to the U.S. for trade negotiations and investors hoped that the United States and China would be able to make a trade deal, even as a planned U.S. tariff hike on Chinese imports took effect. Also, some profit booking from higher levels also added to the bearish movement of the Index for this week. Traders are also cautious of general elections and with the exit poll outcomes, choppiness in the market would increase.
In Friday market, Benchmark Nifty opened flat of the closing on Thursday and remained ranged bound between 11350 levels on higher side & 11250 on the lower side and last traded below support of 11300 levels. With no clarity about who would form the next central government in India, the market may remain choppy till election results are declared. However, if U.S. and China could make any trade deal, then it would provide support to the market, but slower to 8 month Factory Growth & decline in PMI to 51.80 in April from 52.60 in March may limit the gains. On daily charts this week, Benchmark Nifty50 has shown breakout of the H&S pattern with neck line around 11550 levels and also closed below its support of 11300 levels on Friday. Sustaining below this support level, it could test the levels of 11260 while it would have resistance around 11465 levels.
Next week in Indian economic there would be CPI & WPI Inflation data on Monday & Tuesday respectively. On the global front, investors would keep an eye on the outcome of U.S.-China talks on Friday. Also, one should track U.S. Core Retail Sales & Retail Sales on Wednesday. Also market will focus on Q4 results and final phase of election.
ICICI Pru ( Futurea): SELL| Below: Rs 350| Target: Rs 336| Stop loss: Rs 367|
ICICI Pru is correcting from higher levels on the daily charts and RSI also showing sell signal, now placed at 42.93 levels.
DLF ( Futures): SELL| Below: Rs 166| Target: Rs 1| Stop loss: Rs 172|
DLF is in a bearish trend on the daily charts and consolidating around the lower levels. RSI is looking weak and now placed at 38.01 levels.
Hind Zinc (Futures): SELL | Below: Rs 260| Target: Rs 250 Stop loss: Rs 271|
Hind Zinc (Futures) bearish trend on the daily charts and RSI looking weak now placed at 30.19 levels.