Finance minister Nirmala Sitharaman and Prime Minister Narendra Modi met last weekend to discuss about economic concerns pertaining to job loss, slowdown in auto sector and its possible implications on other sectors as well. The government may come up with releasing one-time stimulus package for real estate sector along with taxation-related measures for automobile sector.
However, this does not seem to be enough for market to trade at higher levels. Nifty shed 98.30 points and managed to close at the price level of 10,918.70, breaking 11,000-mark on Wednesday. It is forming a bearish flag pattern. Breaking 10,900 level will add further weakness and the index may touch the level of 10,780 which is expected to act as support. As per option data, huge call writing at the strike price of 11,000 indicates that this level may act as supply zone, whereas strike price of 10,900 may act as support as it holds highest put OI.
In the coming week, we could witness more weakness, and sell on any bounce is recommended.
Buy Hindustan Uniliver Ltd. (above Rs 1,860)
Stop loss: Rs 1,800
The stock is trading in range despite the market’s volatile movement. HUL is witnessing major moving MACD crossover in weekly charts that would result in strong bullish movement. The script is trading above all important moving averages. Considering the technical evidence discussed above, we recommend buying the stock, above Rs 1,860 for the target of Rs 1,930, keeping a stop loss at Rs 1,800 on a closing basis.
Buy Manappuram Finance Ltd (Rs 125.75)
Target Rs 135.50
Stop loss Rs 117
The stock is forming a bullish flag pattern and breakout above Rs 125.75 will lead to a strong bullish movement. The stock is trading above all important averages. We recommend buying the stock at Rs 125.75 for the target of Rs 135.50, keeping a stop loss at Rs 117 on a closing basis.
Disclaimer: The analyst does not hold position in any of the stocks mentioned above.