Angel ONE, Motilal, IIFL: Charts hint up to 24% downside for broking stocks

Market outlook July 02: Trading strategies for stock broking firms in India as the Sebi seeks parity on fees, stricter regulations to options trading.

The Securities and Exchange Board of India (Sebi) on Monday directed stock exchanges and other market infrastructure institutions (MIIs), essentially stock brokers, to discontinue with the practice of levying slab-wise fee structures.

The market regulator said the current structure goes against the principle of equal, fair and transparent access to all market participants.

Currently, exchanges charge trading members (brokers) a slab-wise fee structure for both cash and derivatives segments. The structure is aimed at incentivising brokers that generate higher turnover. READ MORE

Meanwhile, the Sebi has also set an expert committee to look into the measures to protect small investors and dissuade them from taking high risk in futures & options trading, the derivatives market. 

Recently, Zerodha founder Nithin Kamath in a post on X (formerly Twitter) voiced concern for the broking industry; stating that it could face tough times ahead if Sebi implements restrictions, stricter regulations on options trading.

Against this background here's a technical outlook on listed stock broking firms in India

Angel ONE

Last close: Rs 2,579

Downside Risk: 24.2%

Support: Rs 2,420

Resistance: Rs 2,620; Rs 2,670

After a stupendous rally of over 237 per cent in the year 2023, shares of Angel ONE have underperformed and declined close to 26 per cent so far in 2024 owing to profit-taking at the counter. 

Technically, the short-term trend for the stock seems tepid as the shorter-term moving averages are seen languishing below the long-term moving averages. However, the long-term chart suggests, that the overall up trend remains intact.

Further, the stock has corrected roughly 50 per cent of its previous year's rally, and is now seen seeking support around the 20-MMA (Monthly Moving Average), which stands at Rs 2,150 levels; below which the next significant support stands at Rs 1,955. This also implies potential downside risk of up to 24 per cent from present levels. CLICK HERE FOR THE CHART

Having said that, the stock is likely to consolidate in the broad range of Rs 2,000 - Rs 2,750 levels; until we see a clear breakout in either direction. Near support for the stock can be expected around Rs 2,420 levels. Near resistance is seen at Rs 2,620 and Rs 2,670.

Motilal Oswal Financial Services

Last close: Rs 592

Downside Risk: 15.5%

Support: Rs 545; Rs 515

Resistance: Rs 630; Rs 643

Motilal Oswal Financial Services stock has rallied as much as 134 per cent to hit a high of Rs 722 in June 2024. The stock is trading in overbought territory and showing some signs of likely consolidation.

The stock needs to sustain above Rs 643 in order to continue the bullish momentum. Failure to do so can see the stock trade sideways in the coming period. As such, the stock can potentially dip towards Rs 500-mark.

In the interim, daily chart suggests resistance for the stock at Rs 630 - its 20-DMA (Daily Moving Average) and Rs 720. On the downside, support is seen at Rs 545 and Rs 515. CLICK HERE FOR THE CHART

IIFL Securities

Last close: Rs 211

Downside Risk: 21.8%

Support: Rs 196; Rs 186

Resistance: Rs 216

IIFL Securities rallied 68 per cent to register a high at Rs 240 in June. The stock has been rallying around the higher-end of the Bollinger Bands on the monthly scale. However, a sharp expansion in the anticipated trading band, suggests that the stock may enter a phase of consolidation soon.

The bullish pivot for the stock now stands at Rs 216. Failure to sustain above the same on a consistent basis can trigger price correction; wherein near support is seen at Rs 196 and Rs 186; below which the stock can dip to Rs 165. On the upside, beyond Rs 216; key hurdle for the stock lies at Rs 244. CLICK HERE FOR THE CHART

Edelweiss Financial Services

Last close: Rs 66

Bias: Sideways

Support: Rs 61.50; Rs 57.70

Resistance: Rs 68; Rs 73; Rs 85

Edelweiss Financial Services has traded on a sideways note so far this year. More importantly, the stock has consistently found support around its 100-MMA, which stands at Rs 57.70 on the long-term charts. As long as this support holds, the bias is likely to remain neutral.

On the upside, the stock needs to break and trade consistently above Rs 89.50 levels for a bullish breakout. Interim resistance for the stock is seen at Rs 68, Rs 73 and Rs 85. On the downside, the stock may seek support around Rs 61.50. CLICK HERE FOR THE CHART

Geojit Financial Services

Last close: Rs 104

Bais: Positive

Support: Rs 97.55; Rs 90

Resistance: Rs 113.50; Rs 120

Geojit Financial Services stock is seen trading with a favourable bias on multiple time-frames. Near support for the stock is seen at Rs 97.55; below which the next major support shall be at Rs 90.

On the upside, the stock is expected to face resistance around Rs 113.50 and Rs 120. Breakout and sustained trade above Rs 120 can trigger a sharp rally at the counter. CLICK HERE FOR THE CHART