Caution will continue to be the buzzword on backdrop of surging COVID-19 cases that still appears to be a huge concern for our stock markets. Our call of the week suggests the market's biggest risk is seen shifting from inflation to COVID-19. The Government of India said: "Export of injection Remdesivir and Remdesivir Active Pharmaceutical Ingredients (API) prohibited till the COVID-19 situation in the country improves."

Commanding investors' attention will be Q4 earnings for FY20-21. TCS will officially set ablaze the ceremonial starters pistol for the Q4 earnings on Monday, 12th April 2021. Meanwhile, Infosys has said that its Board will consider a proposal for buyback of fully paid-up equity shares of the company. INFY's board will be meet on Wednesday, April 14, 2021 and announce FY21 results as well. Wirpo will announce its Q4 on Thursday, 15th of April 2021. The street is quite positive as is expecting the numbers to be strong given the increasing demand for digitisation on backdrop of rise in COVID-19 cases, large deal wins, and most importantly, a healthy order pipeline.

Key economic events lined up for this week are:

Monday, 12th April 2021: Manufacturing Output (MoM) (Feb), CPI (YoY) (Mar),  Cumulative Industrial Production (Feb), Industrial Production (YoY) (Feb) Wednesday,

14th April 2021: WPI Food (YoY) (Mar), WPI Manufacturing Inflation (YoY) (Mar),WPI Fuel (YoY) (Mar), WPI Inflation (YoY) (Mar)Thursday,

15th April 2021: Imports (USD) (Mar), Exports (USD) (Mar), Trade Balance (Mar)

Technically speaking, confirmation of strength only above Nifty’s psychological 15,000 mark. Going all in long is not advisable until we have closed in bullish territory and confirming to the upside the following day. Our chart of the week says, at the moment there are many tailwinds, like

1. RBI dovish stance.

2. Expectations of a strong March quarter

3. Ramp up in COVID-19 vaccinations.

4. Huge Fiscal Stimulus from the U.S.

5. The street is hoping for a quick economic recovery.

But rising covid-19 cases could spoil the party at Dalal Street.

Establishing long positions advisable only if Nifty is able to close above 15,000 mark. Please note, Nifty's 200DMA at 12,809 mark. The price action for Nifty for this week's trade is suggesting that we are likely to see a 14,451- 15,151 range in near term with buy on strength as the preferred strategy.

The options data for April Series suggests Nifty is likely to be in a broader trading range of 14,000-15,200 as maximum Call OI is at 15,000 followed by 15,500 strike prices. Maximum Put open interest stands at 14000 levels followed by 14,500 levels. Call writing was seen at 15,200 and then at 14,900 strike prices, while there was meaningful Put writing at 14,800 and then at 14,300 strike prices.

Preferred trade for the week: Nifty (14,835): Buy above 15,000, targeting 15,251 mark followed by aggressive intermonth targets at 15,433-15,600 zone. Strict stop at 14,521.

Amongst momentum stocks looking bright on any corrective declines are: ACC, DABUR,  SUN PHARMA, LUPIN, AMRUTANJAN, SUVEN PHARMA, TATA POWER, BIOCON, NAM INDIA, CDSL,  COFORGE, TECH MAHINDRA, RATNAMANI METALS, INFY, TCS, TATA ELXSI, ALKEM, HINDALCO, CROMPTON CONSUMER.Meanwhile, we are negative on stocks like: PVR, INDIGO, ASHOK LEYLAND, BOSCH,  ZEE ENTERTAINMENT, AXIS BANK, INDUSIND BANK.

Before we end, our most preferred pair strategies:

• Pair Strategy: Long KOTAK BANK and Short INDUSIND BANK.

• Pair Strategy: Long  SUN PHARMA and Short  THYOCARE.

• Pair Strategy: Long TATA MOTORS and Short  EICHER MOTORS

(By Prashanth Tapse, AVP-Research Head, Mehta Equities)

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