Stock picks of the day: Nifty likely to hover within 11,100-11,500 levels this week

The trend reversal in the index is not going to be easy this time as disappointment from the earnings has spread over the index majors as well.

 

Markets edged lower for the third successive week and lost over a percent. The sentiment was downbeat from the beginning, citing weak progress of monsoon and disappointing earnings so far.

week is going to be data-heavy, with the IIP and Market Manufacturing PMI data scheduled on July 31 and August 01 respectively.

Besides, auto and cement companies will announce their monthly sales figures. Further, the progress of monsoon, FPI flow, crude oil movement and global market cues will also be closely watched.

We expect continuous buzz on the earnings front as prominent names such as Axis Bank, Hero MotoCorp, Ashok Leyland, Eicher Motors, IOC, Bharti Airtel, ITC and SBI among others announce their results during the week.

We feel that the trend reversal in the index is not going to be easy this time as disappointment from the earnings has spread over to the index majors as well.

However, we may see some intermediate rebound due to recovery in oversold counters and selective buying in the index heavyweights. We expect Nifty to hover within the 11,100-11,500 zone next week.

Select private banks, financials and infra stocks should be preferred over others for long trades while metals, realty and IT may continue to trade mixed.

Here is a list of top three stocks which could give 4-8 percent return in the next three to four weeks:

HDFC Bank: Buy| Target: Rs 2,340| Stop-Loss: Rs 2,200| Upside 4.2 percent

In line with the others, HDFC Bank has witnessed a decent correction from its record high and tested its crucial support zone of the long-term moving average (200-EMA) on the daily chart of late.

Indications are in favour of some consolidation around the current levels, followed by a steady recovery. We advise accumulating within the given range of Rs 2,235-2,245. It closed at Rs 2,244.30 on July 29, 2019.

Hindalco Industries: Sell Futures| Target: Rs 180| Stop-Loss: Rs 200| Downside 6.7 percent

Unlike the other metal counters, Hindalco has been holding strong. However, it is trading on the verge of a breakdown from a narrow range to rejoin the broader trend seen in the market.

The continuous fall in the metal index is added negative. We advise initiating fresh shorts as per the mentioned levels of Rs 193-195. It closed at Rs 191.90 on July 29, 2019.

Vedanta: Sell Futures| Target: Rs 145| Stop-Loss: Rs 165| Downside 8.2 percent

Metal stocks are trading under pressure and Vedanta is also trading in tandem with the others. It has witnessed a fresh breakdown from a consolidation pattern on Monday i.e. July 29 and likely to fresh fall ahead.

We advise creating fresh shorts as per the mentioned range of Rs 158-160. It closed at Rs 156.20 on July 29, 2019.

 MORE WILL UPDATE SOON!!