Day trading guide for Tuesday

ICICI Securities

Analyst name: Dharmesh Shah, Head - Technical
The weekly price action formed a high wave candle indicating a breather amid elevated volatility. Going ahead, in the ongoing expiry week, we expect the index to consolidate with a positive bias in a broad range of 15,400-15,900, thereby establishing a higher support base. Our broader outlook of 16100 remains intact. Current bouts of volatility would make the market healthier as over the past one year, such volatility has always offered incremental buying opportunity.

Current episode therefore should not be construed negatively as a larger uptrend remains in place. Sticking to quality is a mantra to ride such a volatile period. Investors should therefore use dips towards 15,200-15,400 to their advantage to accumulate quality largecaps and midcaps.


F&O Strategy
Analyst: Raj Deepak Singh - Head Derivatives

Buy Shree Cements
CMP: Rs 28,110
Target: Rs 29,500
Stop loss: Rs 27,300
Rationale:

1. Cement stocks are exhibiting significant resilience in the ongoing market volatility and continued buying was seen on any decline. Shree Cements reverted from its sizable Put base of 27,000 amid increased delivery volumes.
   
2. Meanwhile the OI in the stock has declined in the first half of the series along with the price increase, suggesting short covering. There have been recent declines in the past few sessions whereas the price appreciated, which is pointing towards short covering. We feel the current leg of covering should push the stock towards 29,500 levels.

Short M&M June futures
CMP: Rs 777
Target: Rs 730
Stop loss: Rs 805
Rationale:

1. M&M has failed to sustain above 800 levels and underperformed the markets in the last couple of months. As it lacked momentum, Call writing activity was observed at ATM and OTM strikes. As the stock slipped below 800, writers added positions in 800 strike Call as well.
   
2. The OI in the stock was muted in the past few sessions. However, marginal short positions were formed in the stock along with delivery based selling pressure, pointing towards more weakness in coming sessions.

FX Strategy:
Buy USD-INR at 74.00 – 74.10
Target: 74.60
Stop loss: 73.85
Rationale:

• INR continued to remain under pressure as for the 2nd day in a row it is sustaining above 74 levels.
  
• Weakness in the INR is likely to continue as Dollar index moved to fresh 2 months high along with rise in Crude Oil prices.
  

Sell EUR-INR at 88.30-88.40
Target: 87.80
Stop loss: 88.60
Rationale:

• As the Dollar index moved to 2 months high, Euro depreciated against Dollar and EUR-USD moved below 1.20 levels.
  
• Poor economic data and expectation of new stimulus should keep the Euro move in check.