Nifty is now all set for the Budget : Mustafa Nadeem, Epic Research
A yet another week with a narrow range and consolidation ends for Nifty. Muted global and domestic cues, lower volume and post major events kept Nifty in a hangover.
Nifty spent its third week between 11800 - 12000 as indecisiveness was seen with no clear trend being able to establish. Consolidations near all-time high can result in either continuation of the trend or distribution at higher levels. Breadth has been low mostly stocks have seen short built up. almost 143 stocks were in short built up while only 22 stocks were seen with long built up. This also indicates the weakness in breadth.
WPI inflation numbers slipped to 2 year low which is good for the equity market as the recent rate cut would further infuse some more liquidity into the system and try to loosen the credit stress. Secondly Nifty is now all set for the Budget and probably we will be seeing that factor in.
There are multiple things that are in favour at this point in time. A rate cut coupled with GDP growing faster than other Emerging or Developed economies, Lower Inflation and a Decisive Government. To add the cherry on the top we have Crude around $50 mark and in the bearish mode which is again providing another headroom for the government.
Technically, We are still in an uptrend but the market seems to be dull and stalling around all-time highs. On the downside 11800 has been held for quite some time and should hold if bulls need to be in power. Any failure there will call in for a short term correction to 11600 - 11550. Sustaining the line in the sand at 11800 would help bulls be in control and move to 12050.
RITES - Stock outperformed well with good volumes and closed near today's high. It also formed a flag pattern on the hourly chart. We recommend buying above 298 for the target of 302 with the stop loss of 295.
IBULHSGFIN - Stock is showing reversal on the daily chart, it has a support level of the trendline on the hourly chart. It also formed a flag pattern on the hourly chart. We recommend buying around 660 for the target of 680 with the stop loss of 650.
NCC - Stock outperformed well with good volumes and the RSI is also showing reversal on the daily chart. It also gave closing above the 200 EMA on the daily chart. We recommend buying above 101.50 for the target of 103 with the stop loss of 100.