Overall trend remains positive, but some profit-booking likely

Headline indices Sensex and Nifty hit fresh record highs on the F&O expiry day on November 28 as investor sentiment remained positive on the back of positive global cues and strong FII inflows.

Nifty ended at 12,151 while Sensex settled at 41,130, supported by gains in shares of select heavyweights, including ICICI Bank, Reliance Industries and Tata Consultancy Services.

“On the global front, the likely settlement of the first phase of a deal between the US and China has led to positivity with major global indices at their highs. On the domestic side, Strong FII inflows have provided the much-needed support to the market in the absence of any major triggers,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services.

Khemka believes that the current momentum can sustain in the near-term on the back of liquidity flows and positive sentiments. However, he added that some volatility is expected due to global news flows regarding US-China settlement and weaker than expected Q2 GDP data which would be released on Friday, November 29.

Gaurav Ratnaparkhi, Senior Technical Analyst at Sharekhan by BNP Paribas thinks Nifty is eyeing 12,350 as the next target.

He pointed out that Nifty on Wednesday had formed an inside bar on the daily chart which broke out on the upside on November 28 as the index crossed the swing high of 12,133. This indicates that the rally is likely to continue further.

Also, the daily Bollinger Bands have started the expansion, which is in the favour of the bulls.

“One can continue to ride the trend as it unfolds on the upside. The broader market indices are also looking to join the benchmark index in its journey towards the north. The next target for Nifty is placed at 12,350. On the other hand, the support zone now shifts higher to 12,055-12,037,” said Ratnaparkhi.

The rupee dropped by 27 paise to close at 71.62 against the US currency on November 28, ending its two-day winning run due to month-end dollar demand from oil importers and growth concerns ahead of release of GDP data on Friday.

On the institutional front, FPIs were net buyers in Indian markets for Rs 1,008.89 crore while the DIIs were net sellers to the tune of Rs 155.47 crore, provisional data showed.

Big news

Oil-telecom-to-retail major Reliance Industries made history on November 28 by crossing and closing above Rs 10 lakh crore (trillion) market capitalisation.

It is the first listed Indian entity to reach this milestone. In fact, it created a big gap of more than Rs 2 lakh crore between itself and TCS, the second-highest company in terms of market capitalisation.

Maintaining its overweight call on RIL, last week, global brokerage Morgan Stanley said its bull case target price stood at Rs 2,000 (a potential upside of 27 percent from current levels) on hopes of higher refinery margins, potential telecom tariff hike, bottoming P/E cycle, kickstart of gas production, lower capex and ongoing deleveraging.

Bank of America Merrill Lynch also said the company was expected to touch Rs 14 lakh crore in market cap in the coming months.

Technical View:

Nifty formed a small bullish candle, which resembled a Hanging Man kind of formation on daily charts.

Experts feel as the index moved near its trendline resistance, there could be some sort of profit-booking in the coming days, but the overall trend will remain positive in the medium to long-term.

Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told that Nifty can test its critical support on short-term charts which is placed around 11,990 level. However, for the reversal in the short-term trend, the index needs to decisively close below 11,990 levels, he added.

Mazhar Mohammad advised traders to book profits in the next trading session and wait for some pullback in the index before initiating fresh longs.

Three levels: 12,100, 12,159, 12,173

Max Call OI: 12,200, 12,300

Max Put OI: 12,000, 12,100

Stocks in news:

Aurobindo Pharma: USA unit entered in a pact with Profectus BioSciences to buy certain business assets for $ 11.29 million.

CG Power: The company has cancelled royalty pact worth Rs 411.2 crore with Avantha Holdings.

Kohinoor Foods: Oriental Bank of Commerce has declared the company as wilful defaulters as per RBI guidelines.

Technical Recommendations:

We spoke to IndiaNivesh Securities and here’s what they have to recommend:

Raymond: Buy | LTP: Rs 724 | Target: Rs 770 | Stop Loss: Rs 680 | Upside 6%

Page Industries: Buy | LTP: Rs 22,147.95 | Target: Rs 24,000 | Stop Loss: Rs 21,000 | Upside 8%

UltraTech Cement: Buy | LTP: Rs 4,299 | Target: Rs 4,570 | Stop Loss: Rs 4,150 | Upside 6%