A morning walk down Dalal Street | Momentum still favours bears, crucial support for Nifty at 11,000

A volatile Tuesday! Indian market which started off with a mild gap-up failed to keep the momentum and slipped in the red in the last 90 minutes of the trade. The S&P BSE Sensex fell by nearly 300 points while Nifty50 closed below 11,100.

The Nifty broke below the 200-day moving average (DMA), to close at a level last seen in March 2019 and Sensex below 37,400, a level last seen in May 2019.

The Nifty Midcap index closed 2 percent down, hitting its lowest level in 30 months. The Nifty Bank is set for the biggest monthly fall since September 2018, as it plunged 500 points in a day for the third time in July.

The broader market indices ‘BSE Midcap and BSE Smallcap’, too, ended lower by 1.6 percent and 2.1 percent, respectively.

Investors would watch out for the FOMC outcome later in the day. On the economic front, Infrastructure output data for the month of June will be watched out for. On the global front, any positive outcome from the negotiations between US-China for trade tariffs could also provide direction to the markets, suggest experts.

On the institutional front, FPIs were net sellers in Indian markets for Rs 644 cr, while the DIIs were net buyers to the tune of Rs 1079 cr, provisional data showed.

Big News:

As many as 89 companies will declare their results for the June quarter which include names like Allahabad Bank, Apollo Tyres, Eicher Motors, Tata Global Beverages, Petronet LNG, MOSL, JBF Industries, IOC, Future Retail etc. among others.

Eicher Motors: PAT likely to fall by 28% YoY

Petronet LNG: PAT likely to fall by 3% YoY

IOC: PAT likely to fall by 32% YoY

(All estimates are from Motilal Oswal)

Technical View:

Nifty50 closed below 200-DMA, forms a bearish candle on the charts

It was the second consecutive day of fall

The index closed below 11,100 level and formed another large bearish candle on the daily scale which indicated that momentum is still in favour of bears.

The next psychological and crucial support of 11,000 level would be closely watched by traders.

Bank Nifty negated its formation of higher highs – higher lows after three trading sessions and corrected more than 500 points to close below 28,800.

Three levels: 11000, 11072, 11267, 11400

Max Call OI: 11500, 11300

Max Put OI: 11000, 11200

Stocks in news: 

Private sector lender Axis Bank's June quarter (Q1) profit grew sharply by 95 percent year-on-year to Rs 1,370 crore, but provisioning and slippages remained higher. It was supported by NII, other income and operating profit.

Tech Mahindra on July 30 reported a 15.3 percent fall in its Q1FY20 net profit at Rs 959 crore against Rs 1,132.5 crore in the quarter ended March 2019.

Hero MotoCorp Q1: Profit jumps 38.3 percent to Rs 1,256.7 crore versus Rs 909.2 crore led by exceptional gain of Rs 737.5 crore on reversal of calamity fund provision; revenue falls 8.8 percent to Rs 8,030.3 crore versus Rs 8,809.8 crore YoY.

Technical Recommendations:

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

Voltas: Sell| Target: Rs 540| Stop Loss: Rs 580| Downside 4%

Tata Chemicals: Sell| Target: Rs 550| Stop Loss: Rs 590| Downside 4%

Hindalco Industries: Sell| Target: Rs 178| Stop Loss: Rs 197| Downside 6%

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