It is the last day of the week and it does look like bulls will remain in control for the fifth consecutive week in a row.
The Sensex quickly recouped the losses seen on July 8 thanks to positive global cues. Prime Minister Narendra Modi's address at the India Global Week 2020 lifted sentiment further. He said India was already seeing green shoots when it comes to economic recovery.
The broader markets underperformed while the benchmark indices put up a smart show by rallying over a percent each. The Sensex rallied by more than 400 points and the Nifty closed above 10,800 levels.
“Indian equities followed Asian markets as positive economic data from China boosted sentiment. A rise in Chinese iron ore futures and steel prices on the Shanghai Futures Exchange boosted metal stocks in India,” Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services, said.
Experts told Moneycontrol that the momentum remains strong, but further price action is likely to be guided by the number of fresh COVID-19 infections, and management commentary after the June quarter earnings.
Investors are advised to trade light as the trend could reverse or we could see profit-taking near the 200 Daily Moving Average (DMA), which is placed near 10,900 levels, a technical analyst said.
A similar sentiment was echoed by Khemka. He too advised traders to remain stock specific and look at booking profits at regular intervals.
TCS June quarter results hit by COVID storm: How should one trade the IT bellwether?The country's top IT services major Tata Consultancy Services (TCS) on July 9 flagged off the June quarter earnings season by reporting a profit of Rs 7,008 crore, down 12.9 percent QoQ, dented by lockdown-led supply and demand challenges.
| Index | Prices | Change | Change% |
|---|---|---|---|
| Sensex | 72,943.68 | -456.10 | -0.62% |
| Nifty 50 | 22,147.90 | -124.60 | -0.56% |
| Nifty Bank | 47,484.80 | -288.45 | -0.60% |
| Biggest Gainer | Prices | Change | Change% |
|---|---|---|---|
| Eicher Motors | 4,355.70 | 136.35 | +3.23% |
| Biggest Loser | Prices | Change | Change% |
|---|---|---|---|
| Infosys | 1,414.45 | -53.70 | -3.66% |
| Best Sector | Prices | Change | Change% |
|---|---|---|---|
| Nifty FMCG | 53402.25 | 227.35 | +0.43% |
| Worst Sector | Prices | Change | Change% |
|---|---|---|---|
| Nifty IT | 33574.95 | -888.65 | -2.58% |
The year-on-year fall in profit stood at 13.8 percent, which was partially impacted by other income that declined 67.8 percent YoY (down 19 percent QoQ) to Rs 456 crore.
Also read: TCS Q1 misses estimates, profit falls 13% to Rs 7,008 crore
The next big question in front of investors is – what should they do now?
TCS with a market capitalisation of Rs 8 lakh crore is the second-highest among the Indian companies listed on the BSE.
The stock registered a fresh high of Rs 2,302 this week. It has rallied over 50 percent after hitting a bottom of Rs 1,494 in March.
Recently, the counter broke above Rs 2,132 levels, which happens to be the previous tops on the short-term chart. Now, the level of Rs 2,132 has become a strong support for the short-term, a technical analyst said.
“TCS has been facing strong resistance in the Rs 2,200-2,250 zone for the previous five quarters. In Q2 FY21, the stock has shown some sign of breaking out of this upper band of Rs 2,250,” Vinay Rajani, Technical Research Analyst, HDFC Securities told Moneycontrol.
Experts told Moneycontrol that it is still a strong technical buy, hence, any dip in the stock post the result could be used to buy. Rajani added that TCS is looking bullish on all technical parameters and the stock should continue to do well in the coming quarters. "So, every dip should be considered as a buying opportunity by investors."
Nifty technical outlook for Friday:The Nifty formed a bullish candle on the daily chart on July 8. It closed above the crucial resistance level of 10,800, but 10,900 is likely to be a tough level to breach, experts told Moneycontrol.
Rohit Singre, Senior Technical Analyst at LKP Securities, recommends investors book profit rather than create fresh longs. "We see a fresh rally only if we sustain above 11,000 levels."
The Nifty Bank closed July 9 at 22,907 with a gain of 1.43 percent. The index opened positive and after an early consolidation, it headed towards 23,000 levels in the last hour of the session.
It formed a Bullish candle and negated the effect of Shooting Star candle on a daily scale. “For the last 77 trading sessions, it has seen the highest daily close and has been making a higher top - higher bottom formation,” Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services told Moneycontrol.
“Now it has to continue to hold above 22,500 to witness an up move towards 23,500. On the downside, key support exists at 22,300 and 22,000 levels,” he added.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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