Hold on to equities! It is time for a pause, but buy the dip for a target of 12,200

In the worst case scenario, correction may get extended up to 11,200 kinds of levels on the downside before resuming its up move.

 

New sustainable life-time highs on Indian bourses in the midst of global jitters caught many by surprise reinstating the fact that Indian indices are in a long-term bull market as it continued to climb the wall of worries.

However, as the relentless up move on Nifty50 from the recent lows of 10,557 added almost around 1,000 points in the last 6 weeks taking the index towards long-term resistance levels placed around 11,500 from where a fresh breakout is required on long-term charts which shall further facilitate a multi-month up move.

Besides, this vertical up move after a pause of two months led the technical oscillators into overbought zones warranting a correction in the near term which appears to have unfolded from the highs of 11,495 last Friday.

In the worst case scenario, this correction may get extended up to 11,200 kinds of levels on the downside before resuming its up move. In case of a fresh breakout above 11,500 levels, the next logical target can be projected up to 12,200 for the indices.

What can lead the indices?

In line with major indices, Bank Nifty also registered a fresh breakout beyond its February 2018 highs of 27,652 levels. This breakout is projecting a bigger target placed around 29,300 levels.

Hence, private banks may still play a critical role in pushing the indices to much higher levels. However, PSU Banks are still lagging behind and they may continue to remain so but at lower levels, they are attracting fresh buying interest.

Hence, on sharp corrections one can selectively look into this space for better trading opportunities. Interestingly, FMCG index remained positive with new life-time highs even in Friday’s session when broader markets were correcting.

Hence, traders shall focus on outperformers from this space which are continuously hitting new highs. Similarly, IT is looking very promising whereas Autos which are almost 10% away from their life highs may become catch-up plays.

What has changed for the Indian market?

a) Boost in political sentiment?

Apart from earnings growth and the tag of the fastest growing economy in the world from IMF, recent political developments also appear to have positively impacted market sentiment.

One of the main concerns among market participants was about forthcoming general elections in 2019 and the unity of the opposition parties which may create uncertain political environment going forward.

But, the recent no-confidence motion against the existing government appears to have proved to be a blessing in disguise to ruling NDA and market at large.

Some of its allies who looked to be drifting away from it through their bitter criticism have chosen not to vote in favour of the motion but to abstain from voting which is nothing but lending indirect support to the ruling NDA.

It smashed the myth of opposition unity thereby hinting at a stable government formation in 2019 as there is no major shift in political alliances.

b. Emerging Markets on the verge of a rally?

India seems to be the sole outperformer among the Emerging Markets as measured by the MSCI Emerging Market Index which is a gauge of 23 economies.

MSCI Emerging Market Index appears to be positioning itself for a relief rally after taking a hit of 18 percent since January 2018 highs of 1,278 to recent June low of 1,038.

After this vertical fall for almost 6 months, this index is moving in an extremely narrow range of 51 points in the last 45 days suggesting a dramatic reduction in the selling pressure which may lead to at least a relief rally.

Besides, the larger trends in this index are suggesting that recent fall from January 2018 highs is only a correction inside the bull market as the last 6 months correction is looking pretty much like a part of the 4th wave.

Correction in terms of Elliot Wave Theory points out that one more leg of up move is pending for this index which should take it beyond January 2018 highs which again shall be positive for Indian markets.

Is INR on the verge of a breakdown?

With Dollar Index trading above its resistance point of 95, INR may come under pressure if the Dollar Index continues to strengthen further and sustains above 96 which may not be good news for Indian markets in the near term.

Technically speaking, if INR trades above 69 levels then it can extend its weakness between 70 and 71 kind of levels which may not go down well with equity markets.

Here are short-term trading ideas which could give 5-8% return:

Mahindra & Mahindra: Buy| Target: Rs 1020| Stop Loss: Rs 927| Return 8%

With new lifetime highs of 953 in last Friday’s session, this counter appears to be on the verge of a fresh breakout from its contracting structure in which it was moving since May 2018 after registering highs of 933.

Hence, momentum shall pick up the pace once it registers a sustainable close above 950 levels. In such a scenario we can project a target of Rs 1,020.

Hence, positional traders are advised to buy into this counter for the said targets with a stop below 927 on a closing basis.

Bharat Petroleum: Buy| Target: Rs 429| Stop Loss: Rs 380| Return 7%

For the last couple of sessions, this counter appears to be moving in a range of 404 – 384 levels and looks ripe for a breakout from this range. Hence,

positional traders in anticipation of such a breakout shall go long for a target of 429 and a stop of 380.

Asian Paints: Buy| Target: Rs 1490| Stop Loss: Rs 1390| Return 5%

After the recent correction from the highs of Rs 1490, this counter appears to have posted bottom around recent lows of Rs 1394.

As price patterns are slowly shaping up in a positive fashion one can buy into this counter for a test of lifetime highs placed around Rs 1490. A stop suggested for this trade is 1390.

MORE WILL UPDATE SOON!!

11,435 Nifty crucial for bulls; positive momentum likely for these top 5 stocks

The index has to hold above 11,435 to extend its move towards 11,500-11,600 levels.

 

The Nifty failed to surpass Thursday’s high of 11,495 and witnessed a decline in profit-booking. It negated the formation of higher highs of the last five trading sessions and formed a Bearish Belt Hold candle and a Spinning Top candle on the daily and weekly charts, respectively.

The daily chart suggests a pause in positive momentum while the index has been forming higher tops-higher bottoms on the weekly scale. It has been respecting its rising support trend line or a rising channel for the last 32 trading sessions by connecting all the recent swing highs and lows.

It has to hold above 11,435 to extend its move towards 11,500-11,600 levels. On the downside, a drift below 11,350-11,333 could see it decline to 11,250–11,171 levels.

The Nifty rallied 328 points from its July settlement of 11,167 and is facing hurdle near the upper band of the open interest (OI) concentration at 11,500. It has been making higher lows for the last six consecutive weeks. If the previous week’s low (around 11,350) is broken, only then we will see an immediate change in trend.

India VIX moved up 6.37 percent from 12.08 to 12.85, while aggregate put call ratio is hovering near 1.75 levels. Maximum put OI is seen at 11,000 strike, followed by 11,200 strike. Maximum call OI is intact at 11,500 strike, followed by 11,600 strike. We have seen fresh call writing at 11,500 strike, whereas marginal put writing is seen at 11,350 and 11,200 strikes.

Bank Nifty formed a Bearish Engulfing pattern on the daily scale as it corrected from its record high of 28,377 to 28,100 zones. It has negated its higher top-higher bottom formation on the daily scale after six trading sessions.

If it sustains below the 28,000 zone, then weakness could see it trending lower to 27,750-27,660 levels. On the upside, resistance is seen at 28,333. Once this levels is decisively taken out, it can head towards 28,500 and 28,700 levels.

We expect positive momentum in Voltas, Tata Consultancy Services, Jubilant FoodWorks, ITC, M&M, while select state-run, pharmaceuticals and metal stocks could see some volatility.

MORE WILL UPDATE SOON!!

India’s high growth trajectory could help these 3 stocks give better short term returns

Looking at IIP and GDP numbers, one thing is quite clear that India is on high growth trajectory.

 

The Nifty has made a new life high in the week gone by and it has been making a higher top and higher bottom formation. Every small decline is being bought into by the market as supports are gradually shifting higher.

The index trades at 28x times the trailing earnings, which is the highest level in a long time. It means the market has discounted a lot of positive earnings very early while companies still need to deliver on the expectations.

Our view is that Nifty will consolidate at this level, and quality midcaps and smallcaps that have been left behind by the biggies will also rally.

On the macro fronts, the Index of Industrial Production (IIP) for June expanded at a robust 7 percent led by strong growth in manufacturing and capital goods sector, which contributes 78 percent to the index. The IIP had risen by 3.2 percent in May which was dragged down by sluggish growth in manufacturing and power sector.

Looking at the monsoon and favourable input prices compared to previous month, we believe these numbers are quite sustainable. It is also necessary to consider the impact of inflation in this season. We are expecting a slight rise in the Wholesale Price Index (WPI) but it will be in the higher range of the Reserve Bank of India (RBI).

Looking at IIP and GDP numbers, one thing is quite clear that India is on a high growth trajectory.

From the earnings point of view, there are a bunch of companies which are going to announce their results include Cadila Healthcare, Tata Steel, Tata Chemicals, Grasim and Sun Pharma.

Here is the list of stocks that could give better returns in short term:

L&T Technology Services

L&T Technology Services (LTTS) is the third-largest pure play ER&D services provider globally. Its broad-based services portfolio, presence in underpenetrated market segments and deep-rooted client footprint, 43 of the top 100 global ER&D spenders, places it well to address the opportunity emerging from the shifts in global ER&D spend.

During Q1FY19, the company had more than double net profit while it’s revenue increased by 40 percent. On a sequential basis, revenue and net profit increased by 9.2 percent and 24 percent, respectively.

In US dollar terms, revenue stood at $169 million; growth of 5.6 percent QoQ in constant currency, 32 percent YoY. EBITDA margin improved 170 bps at 17 percent from 15.3 percent in previous year quarter.

LTTS has won five multi-million dollar deals across process industry, telecom & hi-tech, industrial products and transportation.

We believe LTTS is well set to tap the shift in ER&D spending from products to software and services, and a rising preference for third-party players.

Suven Life Sciences

Suven Life Sciences is a pharmaceutical research company that leverages its innovation capability to undertake NCE-based CRAMS projects involving discovery and development of molecules for innovator companies.

During Q4FY18, its net profit increased by 56 percent to Rs 62.51 crore from Rs 40.07 crore on YoY basis on 19 percent higher income of Rs 208.29 crore.

It is continuous dividend paying company. It has paid 100 percent dividend in FY17 & paid 150 percent dividend in FY18.

Suven Life Science is on a path to strengthen its core revenue from CRAMS business. The successful completion of trials for SUVN502 would lead to monetisation of this molecule and ultimately boosting its earnings.

SUVN502 which is a lead molecule for patients with moderate Alzheimer’s, SUVN-502, is in phase-2A. Management expects enrollment to be completed soon and results is expected to be out in Q2FY20. We are recommending a Buy on Suven Life Sciences.

BPCL

BPCL is one of the fastest growing state run oil marketing companies. It is created its own niche by being first among peers. Recently it has acquired a 21.1 percent stake in payment bank Fino Paytech Limited, the largest Business Correspondent in Asia.

BPCL will reap huge benefits from this investment as the bank will start expanding its operations. BPCL has posted a quite healthy growth in Q1FY19. Its profit came in at Rs 2,293.26 crore against Rs 744.56 crore on YoY basis while income increased by 23 percent at Rs 82,978.96 crore against Rs 67,422.95 crore.

GRM (gross refining margin) which indicates the difference between the cost of crude oil processed and the prices of refined products, came in at $7.49 per barrel, up from $4.88 per barrel a year ago, which clearly shows that BPCL is on a fast track of achieving better operational efficiency. On back of this numbers and reduce crude oil prices we are recommending BPCL.

MORE WILL UPDATE SOON!!

Health of corporate lenders key Nifty performance in the next 4-5 months

corporate lenders have shown some sign of positive trend this quarter. The pre-provisioning profit (PPP) for PSU as well as private lenders have grown well.

 

The Nifty is trading at an all-time high. At the current level, Nifty is trading at 21 times its expected FY19 EPS. Considering strong domestic inflows, Nifty is expected to trade between 18x and 22x of its expected one year forward earnings.

Inside this broad range of 18x-22x, where Nifty would exactly be, will depend basically on macros, global issues and how corporate facing banks perform. Monitoring corporate lenders performance is also important as it will have a big impact on how ultimately FY19 earning shapes up.

At the beginning of the current financial year, Nifty was expected to witness 23 percent EPS growth in FY19. Out of this 23 percent, the three large corporate lenders: SBI, ICICI Bank and Axis Bank contribution was 7.6 percent. It means if these corporate lenders do not show a profit in FY19 then for Nifty, EPS growth will be 15.4 percent only.

Corporate lenders have shown some sign of positive trend this quarter. The pre-provisioning profit (PPP) for PSU as well as private lenders have grown well.

Advances too have grown at a healthy rate and amongst advances; retail book mix for most banks is improving. Amongst the corporate advances, A-rated books have grown at a healthy pace.

The growth in PPP has not yet translated into healthy Profit After tax but, the management commentary of most of the lenders with high corporate exposure has been rather encouraging. Fresh slippages have been mostly from the watchlist and the high provision coverage ratio of companies gives confidence that by the end of FY19, banks will start reporting growth in net profit.

Below are key takeaways on watch list and slippage from quarterly results of corporate lenders:

SBI: Out of Rs 14,856 crore of gross slippages, Rs 9,984 crore were fresh slippages and rest was Non fund based slippages from NPA accounts. Out of Rs 9,984 crore slippages, corporate slippages were Rs 3,704 crore during the quarter and 91 percent of this was from the watch-list.

The bank maintained guidance of 2 percent fresh slippages for FY19. Watch-list now stands at Rs 24,633 crore against Rs 28,989 crore a quarter back.

ICICI Bank: Total corporate and SME slippages were Rs 2,916 crore. Bank has disclosed BB and below rated portfolio of Rs 24,629 crore which is a potential stress going forward.

Management expects the additions to non-performing loans to be significantly lower in FY19 as compared to FY18 and NPA should decline going forward.

Axis Bank: Slippage was Rs 4,337 crore out of which Rs 2,218 crore of slippage was from corporate portfolio of which 88 percent was from BB and below rated watchlist.

The pool of BB and below rated portfolio increased to Rs 10,400 crore (2.1 percent of total customer assets) against Rs 9,000 crore last quarter. After this downgrade in Q1FY19, management believes that rating downgrade cycle has now normalized.

Bank of Baroda: Total slippages were Rs 4,733 crore out of this fresh slippages were Rs 2,869 crore. 85 percent of fresh slippages was from watchlist.

Watchlist declined from Rs 10,000 crore to Rs 8,600 crore in Q1FY19.

MORE WILL UPDATE SOON!!

STOCKS TO ADD IN PORTFOLIO --->NBCC,TCI Express Limited,RITES,Sanofi India Limited

IndianMarketPulse maintains buy rating in above stocks and can be added in portfolio for potentially higher returns on yearly basis.

Whereas Jet Airways is Exit from Portfolio.

 

MORE WILL UPDATE SOON!!

Top 10 expert moneymaking ideas that could return 6-12% in 1 month

The Nifty hit a fresh record high on Monday and rallied climbed 11,400 for the first time in history and experts feel that the momentum is likely to continue this week as well. The index closed with gains of nearly a percent for the week ended August 3.

The index witnessed value buying on Friday after consolidating for two days last week. Last week, the index was able to reclaim 11,350 on a closing basis. Also, the action was spread across small and midcaps.

After a strong rally seen in July, some would say that markets are looking overbought at current levels but analysts feel the momentum is likely to continue.

The structure is still strong. Some of the previous laggards have started to participate like ICICI Bank, Axis Bank and public sector banks. The midcap index is probably showing signs of forming a base.

The anticipation has now turned into a confirmation. We believe there is still a lot more to offer in days to come. Friday’s strong rally is the perfect example why one should refrain shorting this market at this juncture and rather capitalise such declines to buy into.

Nifty is likely to move towards 11,430-11,500. "Since it’s an uncharted territory, further legs will keep unfolding as we move forward. For the forthcoming week, 11,290 followed by 11,234 would be seen as immediate support.

Here is a list of top 10 moneymaking ideas from different experts that could return 6-12% in the next 1 month:

Arvind Ltd: Buy| LTP: Rs 419| Target: Rs 469| Stop Loss: Rs 401.70| Return 12%

During the penultimate week, the stock price finally came out of its congestion zone which in technical terms can be interpreted as a breakout from the ‘Triangle’ pattern.

The breakout was accompanied by higher than average daily volumes, providing credence to the breakout. However, due to lack of follow up buying, the stock corrected a bit towards the trend line support placed around Rs 412.

As expected, the strong buying emerged at lower levels, which validates this corrective move as a pullback move and the stock would now possibly start a fresh leg of the rally. We recommend investors to buy the stock for an upside target of Rs.469 and a stop loss placed at Rs.401.70.

Bombay Burmah Trading Ltd: Buy| LTP: Rs 1614.70| Target: Rs 1810| Stop Loss: Rs 1509| Return 12%

This stock has undergone some decent time correction over the past three months. Recently, there were a couple of attempts made to break through this congestion zone in the upward direction; but all turned unsuccessful.

However, the bulls did not lose their hope; in fact, they came back strongly on Friday and provided enough force to confirm a decisive breakout above the sturdy wall of Rs 1,582.

With this, the weekly charts are now looking extremely promising. Thus, looking at the rising slope of ‘RSI-Smoothened’, we expect the stock to do well in days to come.

One can look to go long for a positional target of Rs.1810 in coming weeks. The stop loss needs to be fixed at Rs.1,509.

Bata India: Buy| LTP: Rs 938| Target: Rs 1020| Stop Loss: Rs 900| Return 8.7%

After hitting lifetime highs this counter appears to be on the verge of a fresh breakout above its two-month-old ascending channel. Such a breakout will throw up a new target placed around Rs 1,020 levels.

Hence, positional traders should buy now and can add further on declines around 920 and look for a target of Rs 1,020. A stop loss could be placed near Rs 900.

Havells India : Buy| LTP: Rs 641| Target: Rs 697| Stop Loss: Rs 620| Target: Rs 8.7%

This counter registered a breakout above its three-month-old ascending channel with a new lifetime high which is throwing up a bigger target placed around Rs 730.

Interestingly, this kind of breakout on this counter occurred after a multi-month struggle inside the broader range of 590 – 480 kind of levels.

Hence, such a bigger target can’t be ruled out going forward. Positional traders are advised to buy now and on declines up to Rs 625 and look for a target of 697 by placing a stop below 620 on a closing basis.

Yes Bank: Buy| LTP: Rs 372| Target: Rs 390| Stop Loss: Rs 360| Return 4.8%

After the recent correction from the lifetime highs of Rs 394, this counter appears to have bottomed out at the recent low of Rs 356 and resumed its up move.

As the long-term trend is buoyant in this counter it can be expected to retest its lifetime highs. Hence, positional traders should buy into this counter for a target of 390 with a stop of 360.

JK Paper Ltd: Buy | Target: Rs. 167| Stop-loss: Rs. 135 | Return: 10%

JK Paper remained under a consolidation phase in last six-month from a price band of Rs 149-128, taking a strong support at Rs 99 levels, and made a robust rebound from this level recently.

It also made a crucial breakout from the moving average of 200-days EMA placed at Rs 131, thus indicating a reversal trend. The scrip also witnessed a significant volume growth managing to gain about 25 percent on weekly basis.

On the weekly price chart, the scrip registered a solid bullish candlestick pattern indicating a reversal in trend favoring upward momentum.

Further, the weekly RSI at 60 signaled a buying regime at a current level along with positive cues from MACD suggesting an upward shift.

The scrip is currently holding a resistance at Rs 169 and the immediate support level is placed at Rs 126. We have a buy recommendation for JK Paper which is currently trading at Rs. 151.25

Sical Logistics Ltd: Buy | Target: Rs. 203| Stop-loss: Rs. 174| Return: 8%

Sical Logistics formed a reversal trend favoring upward momentum after consolidating on multiple price level from Rs 232-194 towards Rs 163 levels in the last six months.

Although it remained flat during an early trade of the week, it gained strong momentum towards the weekend to close above 200-days EMA placed at Rs 182 levels.

It also witnessed a substantial support from volume buildup as compared to average level. The positive breakout on the weekly basis aided the scrip to form a strong bullish candlestick pattern indicating a sustained trend at the current level.

The weekly RSI trend registered an upward momentum at 64 suggesting a buying regime along with MACD trading on a bullish momentum.

The scrip has a support at Rs 164 levels and medium-term resistance level at Rs 216. We have a buy recommendation for Sical Logistics which is currently trading at Rs. 188.25

Redington (India) Ltd: Sell | Target: Rs. 98 | Stop-loss: Rs. 115 | Return: 6%

Redington India Ltd continued to consolidate on its long-term price chart, slipping below a price band of 158 levels to form multiple low levels over sustain selling pressure.

Last week the scrip slipped below a long-term moving average level to touch 52-weeks low and thus indicating a sustained pressure on selling regime. Further, the volume support continued to remain subdued over a negative trajectory.

The price chart continued to indicate consolidation phase with a formation of bearish candlestick pattern on its weekly price chart post-breach below important average level.

Further, the secondary momentum trend continued to indicate negative signal with RSI slipping below at 34 coupled with bearish outlook from MACD trend.

The scrip is facing a resistance at 128 levels and crucial support at 95 levels. We have a sell recommendation for Redington India which is currently trading at Rs. 104.20.

APL Apollo Tubes Ltd: Buy| CMP: Rs 1,699.25| Target: Rs. 1,900| Stop Loss: Rs. 1,597| Return: 12%

The stock, which was consolidating for the last several days, has come out with a closing above its recent range high indicating a growing optimism in the stock. Price has closed significantly above 21 EMA for the first time since last May.

Moreover, positive divergence in the daily RSI (14) may induce bullishness in the stock. Overall, the technical set is suggesting a decent recovery on the stock.

ZEE Ltd: CMP: Rs 520.60| Buy| Target: Rs. 573| Stop Loss: Rs. 498| Return: 10%

After a steep correction, the stock has been consolidating around the support of a rising trendline on the daily chart. In addition to that, on the weekly chart, a Bullish Harami candlestick pattern is formed which may propel a rally in the stock.

The stock is in a long-term uptrend and is currently trading around the lower band of the rising channel; we expect demand in stock may return over the short-term.

MORE WILL UPDATE SOON!!

5 sectors that could be safe havens for your funds in the medium term

On midcaps we have cautioned investors to stick to quality companies with good fundamentals and ethical management.

  

With the market touching historic highs on a daily basis, we feels investors should look at state-run banks, realty, pharmaceuticals, cement and oil marketing companies for the medium term.

Speaking on an ideal portfolio set up, an investor can park 40 percent of one’s portfolio in bonds, 30 percent in largecaps, 15 percent in smallcaps and 15 percent in midcaps for appropriate diversification.

On midcaps, he cautioned investors to stick to quality companies with good fundamentals and ethical management.

Despite some global challenges, the breakout in the Nifty and Sensex last month was mainly because the largecaps pulled the market higher. The quarterly results are cheering the market in terms of growth expectations and hence the rally. However, there is a lot of euphoria built-up in the markets and there seems to be a higher probability of a correction soon. But, when this happens only time will tell.

 Since this is a crucial year of politics, investors must remain cautious as there would be high volatility in the markets. Since the divergence between the large and small/midcaps is wide, there can be a correction sometime in the near future. However, the exact time cannot be ascertained.

 As the euphoric rally was a fractured one due to global as well as domestic headwinds, we seem to be in the 5th wave in terms of the Elliott Wave Theory. As per the theory, we are experiencing a large divergence in the breadth of the market and any significant trigger might create a big sell-off in the near future.

As per statistics, only 54 percent of the total stocks are trading above their 200-day daily moving average (DMAs), which is the second lowest in a decade. During the 2008 top, 52 percent of stocks traded above their 200 DMAs. This further confirms the 5th wave theory.

In 2018, politics is the biggest risk which can turn the markets in any direction. Other macro risks are growing inflation, rate hikes by the Reserve Bank of India, Brent crude fluctuations which can impact the currency and last but not the least trade wars. With the US being the largest economy, any significant impact on our imports and exports will affect our widening current account deficit.

 Sectors such as state-run banks, realty, pharmaceuticals, cement and oil marketing companies are likely to hog the limelight this year from a medium term point of view.

At a time when the markets are trading at record highs, one can have 40 percent of one's portfolio in bonds, 30 percent in largecaps, 15 percent in smallcaps and 15 percent in midcaps for appropriate diversification.

Midcaps have experienced tremendous pressure and have spiralled down drastically. As they lagged the largecap rally it seems to be more likely that the midcaps will rebound in line with broader markets. However, one must look at quality companies with good fundamentals and ethical management before investing.

MORE WILL UPDATE SOON!!

brokerage house sees Nifty at 11,500, recommends 5 stocks for returns up to 20%

expect sideways to bullish movement for the coming session, within a range of 11,500 on the higher side and 11,200 on the lower side.

 

Market reaction after the Monetary Policy Committee's move to hike rates was restrained, suggesting strength in the current rally. The minor correction cannot be ruled out as the Nifty is approaching the upper end of the rising channel, along with overbought levels of the relative strength index and stochastic, which indicates caution on the upside.

Nifty's five-day simple moving average (DMA) is placed around 11,325, indicating strong strength unless it trades below it. At the same time, the index has higher gap unfilled around 11,185 levels. So, the possibility of prices retracing to fill the gap cannot be ruled out.

Until the benchmark index breaches 11,300 levels decisively on the downside, it has a potential to extend this rally towards 11,450 and 11,500 levels. Recently, the Nifty has given classical cup and handle pattern breakout on the lower timeframe, which has a target of 11,450 as per the pattern.

Upper acceleration band (of 50-day daily moving average) is around 11,450, which makes 11,450 a major resistance. Also, majority of oscillators are in overbought zone, suggesting possibility of profit booking at higher levels. Option data indicates an immediate trading range between 11,500 and 11,200 levels.

We expect sideways to bullish movement for the coming session, within a range of 11,500 on the higher side and 11,200 on the lower side. However, stock-specific action in midcaps can be seen.

Aurobindo Pharma: BUY | Buy Range: Rs 595-Rs620|Target Rs 750| Stop Loss Rs 565| Upside 20%

Aurobindo Pharma has given trend line breakout. After retracing towards its foot, it bounced back on upside and now it is going to form Inverted H&S on weekly chart which is showing strength in coming sessions. Bullish crossover in MACD along with sustainability of RSI above 9 day EMA indicates bullishness in the stock in coming days. Three white soldier on daily chart also setting a bullish tone for upside. Above mentioned rationale suggest accumulating the scrip from the levels of 620 or on dip towards 595 with the stop loss of 565 for the target of 750 marks.

McDowell: BUY | Buy Range: Rs 605-Rs 610|Target Rs 735| Stop Loss Rs 540| Upside 20%

After hitting the peak of 800, stock slipped lower towards its previous resistance which should be acting as a support & chances of developing of demand is higher as it was 200 WMA too. As of now, point of polarity is giving cues to accumulate this stock at lower levels. The RSI also seems to be bottomed out near the oversold zone which can club with the divergence in RSI on weekly chart. As long as it sustains above 540, possibility of moving on upside is higher and it can hit our first target of 720 and second target is 750 with an ease from current levels.

Reliance Capital: BUY | Buy Range: Rs 405- Rs 410|Target Rs 460| Stop Loss Rs 373| Upside 13%

The scrip has been running in a falling channel since long and bottomed out near its support channel line and formed a tweezers bottom at lower levels. As of now, it has been forming pole and flag pattern on daily chart since last few days. Sustainability of RSI above 50 and positive crossover in MACD above reference line are giving cues of breakout on the upside. One can buy this scrip from the bottom line of Flag mast which comes around 405-410 levels with the stop loss of 373 for the target of 450 and 470 levels.

Piramal Enterprises. : BUY | Buy Range: Rs 2750-2760|Target Rs 3030| Stop Loss Rs 2627| Upside 10%

Piramal Enterprises- has given falling channel breakout after giving short-term consolidation on the daily chart. From last few days, it has been trading above its congestion zone after giving double bottom breakout and retest the neck line of double bottom creates buying opportunity in the scrip again. Moreover, the sustainability of RSI above 9 days EMA giving cues for upside momentum. Strong support is seen near 2627 levels too. By looking at all these factors, trader and investor can buy this scrip around 2750-2760 with the stop loss 2627 for the target of 3000 and 3060 levels.

OFSS: BUY | Buy Range: Rs 3950-Rs 3970|Target Rs 4325| Stop Loss Rs 3750| Upside 9%

Currently stock is trading above short term, midterm moving averages which shows strength in the scrip. It has given breakout with spurt in volume which is showing upside momentum in coming sessions. Indicators and oscillators are lending support to its price action. Formation of strong bull candle suggesting positive rhythm in the scrip. By looking at these factors one can buy OFSS at 3970 -3950 with stop loss of 3750 for the target of 4300-4350.

MORE WILL UPDATE SOON!!

Check out top 5 stocks that got ratings upgrade after Q1 results — Should you buy?

Oberoi Realty, Axis Bank, Tata Motors, Petronet LNG and Tech Mahindra are some of the stocks whose ratings have been upgraded by brokerages after Q1 results.

  

The domestic stock market scaled new highs in July, thanks to a strong start to the June quarter earnings season. Companies, excluding those providing financial services, have reported a good set of numbers for the quarter.

For the companies that have already declared their earnings for the quarter under review, average sales growth was around 21 percent, while average EBITDA growth and average growth in net profit was around 20 percent and 14 percent, respectively.

Out of 17 non-financial companies that have declared results, 6 saw earnings beat in excess of 5 percent while 6 companies saw earnings misses in excess of 5 percent.

Having said that, if we were to include the performance of financial services companies in the overall mix, then the earnings season so far hasn't been as great as it seems.

The 1QFY19 earnings season has so far been mixed with aggregates impacted, as has been the case for last few quarters now, by Corporate Banks and Tata Motors.

Of the 32 Nifty companies that have declared their earnings so far, 20 have either met or exceeded net profit expectations, the brokerage said, while 25 have done so on expectations of EBITDA.

Here is a list of top 5 stocks that brokerages upgraded after Q1 results:

Oberoi Realty: Buy| Target Rs 600

Oberoi Realty reported more than three-fold jump in its consolidated net profit at Rs 309.42 crore for the first quarter of this fiscal. Its net profit stood at Rs 91.37 crore in the year-ago period, the Mumbai-based developer said in a statement.

Reacting to the results, HSBC upgraded the stock to buy with a target price of Rs 600. The global investment bank is of the view that the business model will become more robust for the company.

HDFC Securities upgraded the stock to buy from neutral with a target of Rs 598. After a muted 4QFY18, Oberoi Realty (ORL) had an impressive start to FY19 clocking 300,000 sq ft in pre-sales and Rs 620 crore in sales value.

ORL will continue to assess internal thresholds for booking margins. "While the Borivali project has met margin recognition in 1QFY19, for Mulund the entire pending margins will be recognized only later in FY19E," said HDFC Securities in a report.

ORL's recent QIP proceeds of Rs 1,200 crore will be used as growth capital towards fresh land purchases. HDFC Securities continues to assign a NAV premium of 30 percent to capture terminal value.

Tech Mahindra: Accumulate| Target: Rs 729

Tech Mahindra posted results below analyst expectations on July 30, but Chief Financial Officer Manoj Bhat said that he was confident of growth in the company's telecommunications business.

Reacting to the results, CLSA upgrades the stock to underperform from sell earlier and has also raised its target price to Rs 650 from Rs 635 earlier.

The revenue beat was led by the enterprise as telecom business remained soft. Investors should watch for growth recovery. CLSA lifts FY19-20CL margins by 20-40 bps, and earnings by 1-3 percent.

IDBI Capital also upgraded the stock to accumulate with a target price of Rs 729. Tech Mahindra Q1 results have allayed concerns on the Communications segment and confirmed that it has already secured a couple of large deals in Q2 and has a strong deal pipeline.

"IDBI Capital has factored in EBIT margin beat and FX rate of Rs 68, compared to Rs 65.5 earlier, and increase FY19/20 EPS forecast by 2.6 percent/6 percent. We now forecast revenue (US$)/EPS CAGR of 7.7 percent/6.3 percent over FY18-20E.

Petronet LNG: Buy| Target Rs 245

Petronet LNG (PLNG) reported a healthy set of Q1 numbers, with a 42 percent year-on-year (YoY) increase in revenue, led by higher volumes at the Dahej terminal due to increased downstream demand and closure of Dabhol terminal on account of the monsoon.

Reacting to the results, UBS upgraded the stock to buy from sell post Q1 results and has also raised its target price to Rs 245 from Rs 235 earlier.

Strong LNG imports are driving the short-term outlook. Lower utilisation due to higher Regas capacity additions is priced in. Going forward, strong utilisation rates and a 5 percent increase in Regas tariffs to drive FY19 earnings, said the note.

Tata Motors: Buy| Target: Rs 346

Global automaker Tata Motors reported a consolidated net loss for the quarter ended June at Rs 1,862.57 crore, missing estimates by a huge margin. Diesel concerns in the UK and Europe, as well as the duty change impact in China, hit the company during the quarter.

Earnings before interest and tax margin in China was negative 3.7 percent for JLR due to de-stocking, duty change in China, forex revaluation and higher depreciation and amortisation.

Reacting to the results, Elara Capital upgraded the stock to buy from accumulate but slashed its target price to Rs 346 from Rs 362 earlier.

While JLR’s Q1FY19 performance was below par, we note that it was due to 8 percent YoY decline in wholesales led by inventory reduction at dealers end and transitional weakness in China,

The retail growth in Q1FY19 though has been impressive at 6 percent YoY, higher than the FY18 retail growth of 2 percent. Elara Capital expects the wholesales business to bounce back especially in 2HFY19 and expect FY19E volume growth at over 5.5 percent led by new launch ramp-up (RR and RR Sport order backlog of 2 months) and China recovery. Elara reduced JLR/ CJLR EBITDA by 2-5 percent/8 percent, while increase its standalone EBITDA by 3 percent over FY19-20E.

Axis Bank: Hold| Target: Rs 625

Axis Bank reported a satisfactory Q1 FY19, in line with what the management had guided earlier. Reported profit after tax of Rs 701 crore was lower by 46 percent from the year-ago quarter.

Asset quality that had been a pain point for a while showed marked improvement with the gross slippage declining to Rs 4,337 crore.

Reating to the results, domestic brokerage firm, Sharekhan upgraded the stock post Q1 results with a target price of Rs 625. Axis Bank has shown improvement in the overall asset quality and expects the pace of slippages H2FY19 onwards should normalize.

Margins are expected to remain stable as MCLR rate hike effect comes into play. Going forward, ageing related requirements, resolution of stressed assets, and importantly loan book pick up will be key challenges before the bank.

Axis Bank currently trades at 2.1xtimes FY20E book value which we believe is reasonable, however, Sharekhan opine cautious approach to witness how asset quality, management issues play out.

MORE WILL UPDATE SOON!!