Podcast | Stock picks of the day: Nifty likely to find immediate support at 11,650

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Markets consolidated further for the third successive week and ended marginally lower, tracking mixed cues for the week ended June 14.

The bias was slightly on the positive side in the first two sessions, thanks to favourable global cues however buying was restricted largely to selective index majors.

Markets started the week on a feeble note and lost over a percent. Weak global cues combined with feeble domestic data were weighing on the sentiment from the beginning on Monday.

It gradually drifted lower as the day progressed and settled around the day’s low. All the sectoral indices traded in line with the benchmark index and ended lower.

The markets are currently facing headwinds from both domestic and global front, citing delay in the arrival of monsoon, lingering geopolitical tension and rebound in the crude oil prices.

Earlier, it was only the broader indices which were feeling the pinch and now the benchmark has also joined in. We suggest keeping a check on leveraged positions and avoid averaging loss-making trades. The Nifty has immediate support at 11,650 and below that selling may intensify further.

We expect volatility to continue as participants will be reacting list of events on both domestic and global front. First, they will be eyeing the US FOMC meet scheduled on June 18-19.

Besides, US-China trade negotiations and other geopolitical matters will be on their radar. On the local front, they’ll be closely watching the progress of monsoon and the GST council meeting scheduled on June 20.

Here is a list of top three stocks which could give 5-8% return in the next 1 month: Power Grid Corporation of India: Buy | Target: Rs 203 | Stop-Loss: Rs 188 | Upside 5.2 %

Power Grid has rebounded sharply in the last month despite weak broader markets. And, it is currently holding firmly above the support zone of multiple moving averages i.e. 200/100/50-days EMA on the daily chart, indicating a pause prior to further rise.

We advise initiating fresh longs within Rs 191-193. It closed at Rs 194.05 on June 17, 2019.

Ashok Leyland: Sell June Futures | Target: Rs 78 | Stop-Loss: Rs 89 | Downside 8.2%

Mostly Auto packs are reeling under pressure and Ashok Leyland is no different. It has been trading with negative bias for past one year and posted a fresh breakdown today i.e. June 17, signaling negative trend to continue.

We suggest traders go short as per the mentioned levels Rs 85-86. It closed at Rs 83.60 on June 17, 2019.

Canara Bank: Sell June Futures | Target: Rs 245 | Stop-Loss: Rs 268 | Downside 5.8%

In line with other PSU banking counters, Canara Bank is also trading under pressure. It’s currently struggling around the resistance hurdle of multiple moving averages on the weekly chart and likely to see a fresh decline in the near future.

The chart pattern and positioning of indicators are also in sync for further fall. We advise initiating fresh shorts in the given range of Rs 260-262. It closed at Rs 258.60 on June 17, 2019.

(The author is President, Religare Broking Ltd)

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