NIFTY Daily Chart
· NIFTY
after a stellar pre-election rally around 8% thanks to ‘Ab Ki Baar Modi Sarkar’
have been consolidating from couple of trading sessions in the range 7078 –
7172 take a breather
· As election a big event trigger wild swings can
be anticipated tomorrow (16th May 2014)
· After a gap up on 13th (May 2014)
from 7020 - 7067 index has formed a Shooting Star and Doji pattern on daily
charts indicating cautious outlook for short term traders
· The key trend decider for NIFTY for warning on
downside 7078 and 7020, If breaks 7000 support are around 6873 / 6680 / 6254
and upside fresh longs can only be created above 7180 – 7200 for targets of
7301/7445/7501
· Option traders should have a cautious standing
due to the event even out of the money options have been at higher premiums.
Any move against the positions or consolidation can erode the premiums swiftly
Scenario 1:
In case strong stable government
comes in with majority i.e., NDA getting 280+ and NIFTY crosses above 7180 –
7200 euphoria can be seen and further resistance can come for the Index around
7301/7445/7501.
As Metals, Infra, Oil & Gas
and PSU banks are in strong bullish trend further euphoric moves can be seen in
these sectors. Quick 10 – 20% gains can be made in selective stocks.
Stock Picks
Andhra Bank : Buy around 70 – 72 rang with stop loss of
68.50 for targets of 80 – 82
Tata Steel : Buy on any dips around 450 – 460 with stop
loss of 437 targets of 500 and 540
Federal Bank : Buy around 99 – 101 with a stop loss below
95 for target of 110 - 111
Reliance : Accumulate from CMP (1038) up to 990 on any
dips with a stop loss of 954 for targets of 1146/1175/1200
Scenario 2:
In case of a fractured mandate or
less than 250 seats for NDA, which even as per the lower band of polls is
mostly unlikely still anything can be possible as polls went wrong dramatically
in last two elections. Although NDA may form government with outside support,
but with collation weak government can delay the reforms can see a sharp
sell-off.
Technically NIFTY below the gap
support of 7020 – 7000 can see a sharp profit booking or sell-off up to
6870/6680 which can be next key immediate supports. Sector wise beta stock
which have run up swiftly can fall same way is well such as Banks, Infra and
metals.
HDFC Bank – Sell around 800 – 820 with a stop loss of 835 for
targets of 756/740/720
Note: As the volatility
would be higher and wild swings to be anticipated take comfortable positions
with strict stop loss or buy options which one can afford to lose.
Raju V Angadi
Equity Research Analyst
Disclaimer: This is just an view based on the research of individual for educational purpose. So kindly trade along with the consultation of your financial adviser,
market trends
, price action and own risk appetite considered while investing or trading in markets
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