Bank Nifty over-weighing Nifty: Nifty Discounting rate cut, declining GDP forecast and auto sales
The accommodative stance of RBI was not able to give strength to the market and Nifty lost its morning gain of 97 points. Banking stocks got more sensitive to the rate cut and as result Banknifty plunged 2.55 per cent resulting Nifty to close at 11,163.85 after breaking the immediate support level of 11,250. Market had shown correction because investors are losing confidence because of declining auto sales, GST collection and a declining forecast of GDP growth. From the option data we are expecting that the coming week may see a correction up to 11,000 level.
We can see a big momentum in following stocks:
Buy Aavas Financiers above Rs 1,695
Target: Rs 1,895
Stop loss: Rs 1,590
The stock is showing a breakout in daily chart and a resistance breakout from the levels of 1695 will bring momentum to the stock and the stock is trading above its 200 dayEMA. Considering the technical evidence discussed above, we recommend buying the stock above 1695 for the target of Rs 1,895, keeping a stop loss at Rs 1,590 on closing basis.
Buy V Guard Industries above Rs 228
Target: Rs 250
Stop loss: Rs 220
The stock is trading above all important moving averages, after consolidating in a narrow range stock has given breakout from the resistance level of 226 and if the stock will break the most immediate resistance of 228 it will lead to a bullish movement. We recommend buying the stock at 228 for the target of Rs 250, keeping a stop loss at Rs 220 on closing basis.
Disclaimer: The analyst does not hold position in any of the stocks mentioned above.