Report by- Sabyasachi Bhattacharya
Cadila Stock to watch out for next week –
Cadila has tested its 52 week low for the fifth time this year. With the price around 345 it is relatively undervalued. This stock has shown a lot of potential and whenever it tried to cross below the 52 week low it has been unsuccessful and bounced right back up as shown on the chart given above. Positional investors can accumulate this stock in their portfolio with a stop loss at around Rs 335. The immediate target for this stock can be Rs 355 and the next target can be Rs 365. This is a calculated risk based on the parameters as the downside for this stock looks bleak. But before investing do your own calculations and invest accordingly.
Source-Purple Trades Research Department
Crude prices decreasing but rupee is weakening. Is the economy healthy?
The year 2018 will be remembered by currency traders for a long time. The rupee which started the year at 63.7 to a US dollar is likely to close around the 70 mark, a fall of 9.8 percent. This fall, however, does not capture the anxious moments for the government, importers and traders when it touched its lowest level ever at 74.4 to a dollar as crude oil prices rose to $85 a barrel. Rupee depreciation against the US dollar is at a five-year high as compared to a 20-year average annual depreciation of 3 percent. However, oil is now below the $50 mark, a fall of over 30 percent but the rupee has corrected by only 5.7 percent from its peak. So why is the rupee not gaining in strength despite the sharp fall in oil prices? India is one of the largest importers of oil in the world, importing nearly 80 percent of its requirement. However, oil is only one of the reasons that caused the currency to weaken in 2018. Though oil prices have come down, the underlying economy is showing signs of stress. Take the case of the current account of deficit (CAD) which has widened to 2.9 percent of the GDP in the second quarter of this fiscal as compared to 1.1 percent in the previous year. While a large part of this is due to high oil prices, it’s also true that our non-oil deficit too has gone up. Further, a global slowdown on account of the US-China trade war is expected to impact India’s exports which have slowed sharply in November 2018 to 0.8 percent as compared to 17.86 percent in October 2018. A bigger problem is the structural weakness in the economy with India’s fiscal deficit near 115 percent of the 2018-19 target. With elections around the corner and the recent performance of the government in state elections it is very likely the government will launch a series of populist measures which will dent the deficit further. Both FII and FDI investors would not be keen on betting on India in these circumstances. Thus, even though oil prices have dropped sharply and other factors like a strengthening dollar and liquidity stress in the NBFC sector which were all responsible for the fall in rupee have sorted themselves out, the rupee continues to remain relatively weak.
Source-Purple Trades Research Department
Indian markets witness another bullish day-
Chart source- Upstox
Indian markets had a good outing today as the Indian Index Nifty had a High Open today after which it started moving in a range bound fashion. There was a lot of volatility in the market. The Nifty has kicked off January series on a strong note, ending above 10,850-mark. Strong global cues, weaker crude as well as strengthening rupee were some of the primary factors behind the market’s rally. At the close of market hours, the Sensex was up 269.44 points or 0.75% at 36076.72, while the Nifty was higher by 80.10 points or 0.74% at 10859.90. The market breadth was narrow as 1546 shares advanced, against a decline of 1049 shares, while 163 shares were unchanged. Sun Pharma, Vedanta, and Titan were the top gainers, while Coal India, TCS, and Bharti Infratel lost the most.
Let’s take a look at the heat map-
Let’s take a look at the performance of major Indices-
Global markets had a bullish day today. Asian Indices along with European Indices CAC, DAX and FTSE were all seen in the GREEN. US Index NASDAQ wqas seen in the RED along with NIKKEI
Source- MoneyControl, Purple Trades Research Department
Key Points for Traders to watch out for while trading Nifty tomorrow-
- 10,815 is a short term support for Nifty.
- If Nifty breaks 10,815 then it has the potential to go down.
- 10,900 is a short term resistance for Nifty.
- If Nifty breaks 10,900 then it has the potential to go up.