- The week is a data heavy week with the quarterly and annual results for the fiscal starting off. Additionally, there will be key macro data on the front of CPI inflation for March and IIP for Feb coming out this week. Watch for data action.
- The markets sentiments improved sharply after the RBI maintained a dovish outlook on rates. The markets rallied by over 200 points in the last 2 days and may take a pause. One can use bounces for selling stocks like Axis and ICICI Bank.
- FIIs were net sellers to the tune of Rs.(-525) crores while DFIs bought Rs.1305 crore on Friday. Interestingly, FPIs have pumped in Rs.3700 crore into debt in the last 5 days hinting that risk-off may not really be an issue.
- Both the Dow and the NASDAQ cracked 2.5% on Friday due to fears of a trade war. Asia appears to be largely benign but the SGX Nifty is already under pressure. The sell on rises story looks set to continue in Indian markets.
- After the sharp bounce in metals and select private banks like ICICI Bank and Axis, the situation is precise to buy put options on both sectors. The intensifying trade wear is likely to hit metals and banking vulnerability may peak this week.
- Cadilla Healthcare could be an interesting pick at around the level of 390 with a target of Rs.460 in 1 month time. Apart from earnings visibility, the stock is also less vulnerable to the vagaries of the US FDA pronouncements.
- We hold on to our two best bets in the financial space of Indiabulls and Bajaj Finance with targets of Rs.1600 and Rs.2100 respectively. We expect these targets in 1 quarter.
- We believe that the trade war is far from over and one must look to each rise to short sell the market, preferably through put options.
