Chart check: How to position yourself ahead of Q4FY21 results season

India Inc is geared up to report its March quarter earnings from next week onwards with IT bellwether Tata Consultancy Services (TCS) scheduled to kick start the results season from Monday, April 12. Thereafter, Infosys, Wipro and Mindtree will report Q4 numbers on April 14, 15 and 16, respectively. 

Led by a surge in prices of metals and energy and a continued better show by lenders, India Inc is expected to report high double-digit growth in revenue and one of the highest quarterly profits in the fourth quarter of 2020-21.

The country’s top brokerages expect Nifty50 companies to report a combined net profit of Rs 1.2 trillion in Q4FY21, translating into year-on-year growth of 142 per cent from Rs 49,645 crore a year ago.

While the on-year earnings growth will be amplified by the low base in Q4FY20 due to Covid-19 lockdown, the growth is expected to be down around 2 per cent on a sequential basis due to pent-up demand getting exhausted and the adverse impact of rising metals and energy prices on consumer goods and manufacturing companies. READ EARNINGS EXPECTATIONS HERE

As the earnings season is set to be flagged off, here is how you can position yourself:

S&P BSE SENSEX

Likely target: 50,800 -  51,200

Upside potential: 1.42% - 2.22%

The index is continuously making efforts to conquer the 50-days moving average (DMA), placed at 50,090 levels. A successive close above this level may result in a breakout towards 50,800 and 51,200 levels, as per the daily chart. The Relative Strength Index (RSI) has formed a "Inverse Head and Shoulder" pattern, which may breakout above 51.50 levels. The immediate support comes at 49,200 levels.CLICK HERE FOR THE CHART
 
NIFTY50

Likely target: 15,000 - 15,200

Upside potential: 0.74% - 2.08%

The index has managed to sustain above 50-DMA placed at 14,817-mark. If this sustains, a decisive move towards 15,000 and 15,200 cannot be ruled out. The RSI needs to breakout above 52.50 value to build an aggressive move on the upside. The current scenario suggests the index is hovering around the 50-DMA, as per the daily chart. The support comes at 14,750 levels. CLICK HERE FOR THE CHART
 
NIFTYBANK

Likely target: 34,621 (only upon holding the 100-DMA)

Upside potential: 5.55%

After the breach of 50-DMA level, the index succumbed to the selling pressure. This resulted in a move towards the 100-DMA, currently placed at 32,640 levels. As long as this moving average support is held, one can expect a recovery towards 34,621 levels, which is the 50-DMA. The Moving Average Convergence Divergence (MACD) has fallen below the zero line, suggesting weakness and negative direction, as per the daily chart.CLICK HERE FOR THE CHART   

NIFTY IT

Likely target: 27,500 - 27,800

Upside potential: 1.03% - 2.13%

On April 8, 2021, the index managed to claim a fresh all-time high of 27,413 with a strong upmove in major IT stocks. This indicates a positive bias for upcoming sessions and an expected rally towards 27,500 and 27,800 levels. The MACD has successfully managed to sustain above the zero line and now, along with a positive crossover, the momentum and direction are anticipated in the upward direction. The immediate support falls at 26,900 levels.. CLICK HERE FOR THE CHART

NIFTY AUTO

Likely target: 10,200 - 10,400

Upside potential: 2.51% - 4.52%

The "Head and Shoulder" pattern has dismantled the upside bias in the current scenario. This pattern is indicative of weakness and a negative sentiment. That said, the index is currently holding the support of 100-DMA currently positioned at 9,840 levels. Till this support is defended, the bullish bias may rally towards 10,200 and 10,400 levels, as per the daily chart. CLICK HERE FOR THE CHART

NIFTY FMCG

Likely target: 35,700 and 36,000

Upside potential: 1.22% - 2.07%

The index is attempting to conquer the resistance of 35,000 with an aggressive move. This sentiment is supported by 100-DMA placed at 33,587 levels. The immediate support comes at 34,800 levels. The MACD has crossed the zero line upward, indicating a positive trend in the upcoming sessions. The rally may move towards 35,700 and 36,000 levels. CLICK HERE FOR THE CHART

NIFTY PHARMA

Likely target: 13,200

Upside potential: 2.40%

The index has taken the support at 200-DMA with immediate resistance placed at 12,500 levels. Now, with the up move above the zero line, MACD has indicated further upward direction towards the next resistance of 13,200 levels, as per the daily chart. The immediate support comes at 12,500 levels. CLICK HERE FOR THE CHART

NIFTY METAL

Likely target: 4,600 to 4,680

Upside potential: 3.14% - 4.93%

The weekly chart clearly indicates a strong positive sentiment in the overbought category of RSI. The medium-term outlook looks bullish for the index. The immediate support comes at 4,250 levels. A positive crossover of 50-DMA and 100-DMA indicates a rally towards 4,600 to 4,680 levels. CLICK HERE FOR THE CHART