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Published on 2/04/2020 3:57:30 PM | Source: ICICI Direct

Quant Pick - Nestle India Ltd - ICICI Direct

Posted in Broking Firm Views - Short Term Report| #Food Production #Nestle India Ltd #Trading Report #ICICI Direct

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Buy Nestlé India in the range of | 15700-16300, Target: | 19000; Stop Loss: | 14100; Time frame: Three months

 

Derivatives and Quantitative Outlook…

* Nestlé India has recovered quite sharply from the immediate decline seen post the market breakdown below 10500. Consumption stocks are seeing buying interest on the back of the recent stimulus given by the government. The Finance Ministry announced a stimulus comprising a | 1.7 lakh crore relief package for the poor, which is leading to this move in the FMCG space

* It seems money is flowing into this space in the current jitters. Due to sharp market fall, maximum leverage has already closed in certain stocks like Nestlé. It has seen 31% closure in open interest while the current open interest is the lowest seen since 2018 when the stock was reeling near | 12000. Thus, it means the current pullback is led by cash buying that should make it a sustainable move for some time

* Some value buying was seen near | 13500-14000 in Nestlé. It seems the market has absorbed major negativity in the current prices. Thus, a fresh surge in certain stocks indicates towards money flow from certain market segments

*  After consolidating near | 12000 since 2018, the stock has consolidated near | 15000 in the second half of 2019. In the recent decline, it tested those levels. The stock is more likely to continue its recovery with immediate support near | 15000

* The stock has shown a tendency of recovering above mean+2sigma levels in the last three years. Currently, these levels are placed at | 16000. It has recovered above these levels quite fast. This shows the primary trend of the stock is up and it should start holding above | 16000 levels also soon

 


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