A morning walk down Dalal Street | Uptrend will get confirmed if Nifty closes above 12,000


A volatile day for Indian markets but bulls managed to take control and pushed the Nifty50 above 11900 levels.

The market was volatile and settled almost unchanged amid mixed cues. Initially, weak global markets and mixed macroeconomic data were weighing on the sentiments.

However, recovery in select index majors in the latter half pared the intraday loss and aided flat close in the end.

Nifty is consolidating in a narrow range of 11,800-12,000 so far in June. Analysts advise traders to wait for a breakout or a breakdown before initiating any trade in either direction that could eventually get over before or after the Budget.

Snapping its two-session gaining streak, the rupee dived 16 paise to close at 69.50 against the US dollar June 13 amid a sharp rise in crude oil prices.

On the provisional front, FPIs were net buyers in Indian markets for Rs 172 crore, while DIIs were net sellers to the tune of Rs 444 cr, provisional data showed.

Big News:

High beta stocks which were one of the main contributors to the market rally seen from January-May period seems to have lost momentum post election results on May 23 when Nifty50 hit a fresh record high of 12041.15 while the S&P BSE Sensex touched a life high of 40,124.96 on the same day.

So, what are high beta stocks? A beta coefficient is a measure of volatility or systematic risk of a stock in comparison to the unsystematic risk of the market.

High-beta stocks are supposed to be riskier but provide a potential for higher returns; low-beta stocks pose less risk but also lower returns, it said.

Among BSE500, 79 stocks have given negative returns which have a beta over 1 since May 23 to June 11. Out of 79, as many as 19 stocks, fell 10-60 percent in since May 23rd to June 11.

They include companies like Suzlon Energy, Indiabulls Housing Finance, CG Power, Jaiprakash Associates, Reliance Power, Dilip Buildcon, Reliance Capital, and Manpasand Beverages.

Technical View:

Nifty forms a Hammer pattern on charts and closed above 11900 levels

Hammer pattern on daily charts that indicates declines are being bought near the lower band of the trading range.

The follow-through buying in the coming session and index closing above 12,000 will confirm uptrend otherwise consolidation may continue, experts said.

Three levels: 11817, 11931, 12040

Max Call OI: 12000, 12500

Max Put OI: 11500, 11800

Stock in news:

HDFC may offload 4.2 percent stake in Gruh Finance on June 14, according to CNBC-TV18. The stake sale may be done at a floor price of Rs 290 per share. The base deal size is expected to be around three crore shares with an upsize option.

The US Food and Drug Administration has pointed out data integrity lapses at Aurobindo Pharma Limited finished dosages plant at Bachupallynear here.

The National Company Law Tribunal (NCLT) on June 13 adjourned the hearing on Jet Airways insolvency case to June 20. Remember, the stock fell by 16% on Thursday.

Technical Recommendations:

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

ICICI Lombard: Buy| LTP: Rs 1149| Target: Rs 1211| Stop Loss: Rs 1124| Upside 5%

KEC International: Buy| LTP: Rs 323| Target: Rs 346| Stop Loss: Rs 313| Upside 7%

Maruti Suzuki June Futs: Sell| LTP: Rs 6792| Target: Rs 6588| Stop Loss: Rs 6893| Downside 3%

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