By Rahul Shah
After a painful start to the previous week, stocks enjoyed a massive bounce in the last two trading sessions and clocked the best weekly advance in more than a year on optimism over peace talks between Moscow and Kyiv, clarity by the US Fed on its future monetary policy and after Beijing’s signal that it was ready to shore up markets to ease off its tech crackdown. Moreover, oil price fell over 30% from the recent high of $140/bbl to below $100/bbl and USDINR corrected to below 76 from the record high of 77 which have boosted the market sentiment.
Focus remains on Russia’s invasion of Ukraine and its impact on the global economy as surging commodity prices ramp up expectations of inflation across the world. Sanctions on Russia have raised concerns it could default on its debt, but Moscow said Thursday it had paid interest on dollar-denominated bonds due this week. Not only the domestic market but also the entire global economy will feel the effects of the crisis through slower growth, trade disruptions, and steeper inflation. However, declined oil price, fall in USDINR and FIIs buying interest will be a major boost to the market sentiment. Besides, signs of progress in peace talks between Russia and Ukraine and China pledging to support to its economy will add fuel to the market sentiment. The Fed’s decision to hike interest rates six more times this year is in line with expectations. Despite the ongoing Russian invasion of Ukraine, talks of a ceasefire delivered mid-week support. A retreat in crude oil prices in the week added further support. Chinese President told U.S. President Joe Biden during a Friday phone call on the Ukraine crisis that the world’s prevailing trend of peace and development is facing serious challenges.
Present decisive upside breakout of the falling channel could indicate a continuation of sharp upside momentum for the near term. The potential up upside targets to be watched are around17500-17700levels in the next few weeks. Immediate support is placed at 17050 levels.
Ambuja CementTarget: Rs 325 | Stop loss: Rs 297Ambuja Cement has formed a reversal from the oversold zone and it has formed a bullish candle on the daily scale indicating buying interest. RSI oscillator is also positively placed on the daily scale. Considering the current chart structure, we advise traders to buy the stock for an up move towards 325 with a stop loss of 298
SRFTarget: Rs 2750 | Stop Loss: Rs 2470SRF has given a channel breakout on a daily scale forming a bullish candle. It has shown strength with follow up buying seen along with good volumes. RSI oscillator is also positively placed on the daily and weekly scale. Considering the current chart structure, we advise traders to buy the stock for an up move towards 2750 with a stop loss of 2470.
(Rahul Shah is a Senior Vice President, Group Advisory Leader-PCG, Broking & Distribution, Motilal Oswal Financial Services. Views expressed are the author’s own. Please consult your financial advisor before investing.)
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