Trade Setup for July 10; Stocks in Focus and Selling Pressure for Indian Markets

Trade Setup for July 10; Stocks in Focus and Selling Pressure for Indian Markets

Indian markets witnessed a decline on Friday after many sessions of strong buying that led to many lifetime highs for NSE Nifty and BSE Sensex. Market participants expect decline to continue in today’s session and if global cues turn negative, we could see a correction in Indian equities. A correction in the markets was long expected by many market analysts as some stocks have reached uncomfortable valuations. We could also see stock specific action in the coming weeks as companies will start announcing quarterly results. Japan’s NIKKEI was down by 0.6 percent in today’s session but Shanghai was firm by 0.4 percent.

TCS, Uflex, Bank of Maharashtra, Container Corporation and LTIMindtree will be in focus today. Technical research expert Vaishali Parekh from Prabhudas Lilladher has three stocks on her radar for the session. Parekh has suggested BUY Call for Tata Motors at current price for target of Rs 648 with Stop Loss at Rs 608. Parekh has suggested BUY Call for PSU banking counter Canara Bank at Rs 333 with target price of Rs 347 and Stop Loss at Rs 327. Mazagon Dock is on Parekh’s radar with BUY Trade suggested at Rs 1322 with target price of Rs 1367 and Stop Loss at Rs 1300.

For overall market and NSE Nifty levels, Parekh added, “Nifty once again witnessed resistance near the 19,500 zone and with heavy profit booking seen slipped down to close near the 19,350 zone with again the bias and sentiment turning into cautious approach to some extent. Once again, we maintain the near-term support zone near 19,300 levels as said earlier, whereas the upside target remains intact at 19,800 to 19,900 levels and select stocks continue to show momentum with strength.”

Market expert Amol Athawale from Kotak Securities believes that markets could face further weakness in today’s trade unless NSE Nifty manages to cross 19,450 levels. His target for NSE Nifty is 19250 – 19,200. We can expect buying at these levels. Athawale has suggested BUY around these levels with Stop Loss at 19,150. Bank Nifty also witnessed decline on Friday. As per Athawale, below 45,000 levels, Nifty Bank can slip towards the 20-DMA of 44,300 - 44,200 if weakness engulfs banking & finance sector.

As per Siddhartha Khemka from brokerage house Motilal Oswal, "Globally, sentiments turned sour after strong US private jobs data raised the probability of interest rate hikes by the Fed in its upcoming meeting. Investors look ahead to the release of the latest US nonfarm payrolls late Friday to provide further clues into the Federal Reserve's policy outlook."

Ashwin Ramani, Technical Analyst at SAMCO Securities believes that market could get support at lower levels. Selling was witnessed in Bank Nifty above 45,000 levels and support can come around 44,500. As per Ramani, "In Bank Nifty heavy call writing was observed at 45,000 Strike. It has taken support from the 38.2% Fibonacci Retracement of 44,846 drawn from the low of 43,520 made on 23rd June to the high of 45,656 made on 4th July. A break below the 38.2% retracement level can take Bank Nifty to 44,500, where its next visible support is placed."

It will be an interesting day for the markets today. There is a strong chance of further weakness but we can also be surprised by recovery in the markets. US and European markets witnessed recovery toward the end of the trading session on Friday. In case European markets open positive today and US Futures opens in the green, we could see recovery in Indian markets during afternoon session.