Unfortunately, I will not be able to write the complete weekly market outlook but am sending out a brief on indices we use regularly and some stock ideas:
· Nifty – CMP 5367
o According to my reading of the charts the Nifty should take support at current levels and find the strength to bounce from here to levels of 5450 / 5500. However if the 5350 level is broken the, we should see downside limited to 5250. For now, let’s just stay with the trend rather than preempt a short in the market. Ideal strategy would be to Buy the Nifty with a stop loss at 5350 and hedge it with a Nifty 5200PE August series trading at 47.6
· Bank Nifty – CMP 10,161
o This index has shown the first sign of tiring but for now even this could head higher considering the trend. On the upside we could see this index touch levels of 10300/10400 but the downside support comes in at levels of 10100/9999
· BSE Sensex – CMP 17,868
o This index has witnessed a fall from almost 18200 levels and if the level of 17800 holds then the upside could take it to levels of 18300 / 18500. However if this 17800 level is broken then we could see downsides till 17600 / 17400.
In terms of stock specific ideas, from the Nifty 50 our picks are:
· GAIL – Buy at 438.5 for a target of 455; stop loss at 430 (~4% gain)
· HDFC Ltd – Buy at 2980 for a target of 3050; stop loss at 2960 (~2% gain)
· Hero Honda – Buy around 1800 (CMP 1814) for a target of 1900 in a month with stop loss at 1750 (~6% gain)
· Reliance Industries – Buy at 1009 for a target of 1040; stop loss at 980 (~3%gain) RIL should close in the green tomorrow which should be a good start for the 3% gain
Kindly hedge these longs with a Nifty Put. Hope this helps.
Dewang K. Mehta
DENIP Consultants Pvt. Ltd.
www.denip.in | www.twitter.com/denipconsultant
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