The market extended losses for yet another week with the Nifty 50 losing 1 percent and negating an 11-week higher highs formation, indicating a bearish reversal. Experts feel 21,000 is expected to be the key to watch out for in the current week, which is full of events such as interim budget, and FOMC meet outcome, while on the higher side, 21,500 is likely to be the key hurdle, followed by resistance at the 21,700 levels.
The Nifty 50 during the last week settled at 21,353 level, while the Nifty Midcap 100 index was down 1.8 percent and Smallcap 100 index dropped 0.71 percent during the week.
"When examined on a broader scale, a head and shoulders pattern confirms a bearish trend. This does not bode well for the bulls, suggesting potential challenges in the short term," Sameet Chavan, head of research for technical derivatives at Angel One, said.
He feels the Budget week is known for volatility, and "considering the above formation we lean towards the bearish side".
In this scenario, the levels to monitor are around the psychological mark of 21,000, coinciding with 50SMA, and in the case of any negative surprises, the Nifty may decline towards 20,800 or even towards the bullish gap of 20,500, while on the flip side, resistance is anticipated, with 21,500 and the last week's high of 21,750 seen as formidable obstacles before Nifty targets the recent landmark high of around 22,100, he said.
Considering the overall chart structure, Vidnyan Sawant, HOD - Research at GEPL Capital also feels there is an anticipation of short-term volatility, with support near the 21,050 – 21,000 zone.
Meanwhile, Sameet Chavan advised traders to exercise caution, avoiding undue risks until there is greater clarity.
Moneycontrol collated a list of top 10 stock ideas from experts with a 3-4 weeks perspective. The stock return is based on the closing price of January 25.
Expert: Shrikant Chouhan, head-equity research at Kotak Securities
Reliance Industries: Buy | LTP: Rs 2,706 | Stop-Loss: Rs 2,610 | Target: Rs 2,900 | Return: 7 percent
After the short-term correction in the counter from the higher levels, the downward momentum had stopped around its support area.
On daily charts, the counter has formed an reversal formation at its important demand zone. Therefore, the structure suggests a revival of the uptrend from the current levels in the coming horizon.
Samvardhana Motherson International: Buy | LTP: Rs 115.4 | Stop-Loss: Rs 110 | Target: Rs 124 | Return: 7.5 percent
The counter has shown a robust rally from the lower levels in the recent weeks. Moreover, there is a fresh breakout along with decent volume from the ascending triangle chart formation on the daily scale.
As a result, the comfortable close above its breakout zone suggest upward momentum to persist in the coming sessions.
Zomato: Buy | LTP: Rs 136 | Stop-Loss: Rs 130 | Target: Rs 145 | Return: 6.6 percent
The stock witnessed a spectacular up move from the lower levels in the recent sessions. Additionally, it is continuously trading in an symmetrical triangle chart formation along with decent volume activity.
Therefore, the overall formation indicates at a likely breakout for a new leg of up move from the current levels.
Expert: Omkar Patil, technical & derivatives analyst - institutional equity at Ashika Group
NMDC: Buy | LTP: Rs 217 | Stop-Loss: Rs 209 | Target: Rs 240 | Return: 10.6 percent
The stock of NMDC is currently in a clear uptrend, characterized by the formation of higher highs and higher lows. The recent upward movement in the stock found support from the ascending trend line.
Additionally, the stock is presently trading above the 12-day EMA (exponential moving average), confirming the continuation of the uptrend.
Going ahead, we expect the prices to move higher till the mark of Rs 240, where the stop-loss must be Rs 209 on a daily closing basis.
SAIL: Buy | LTP: Rs 119.10 | Stop-Loss: Rs 114.5 | Target: Rs 130 | Return: 9 percent
The stock of SAIL has recently surpassed the resistance level of Rs 112. While the recent upmove in the stock was seen with a surge in the volumes. Also the RSI (relative strength index) value above 50 mark reflects the presence of positive momentum in the trend.
Going ahead, we expect the prices to move higher till the mark of Rs 130 where the stop-loss must be Rs 114.5 on a daily closing basis.
Ipca Laboratories: Buy | LTP: Rs 1,115.45 | Stop-Loss: Rs 1,075 | Target: Rs 1,200 | Return: 7.6 percent
The stock can be seen trading near its support at Rs 1,065. Recent dip in the prices took support at the 50-day EMA. The RSI currently have formed double bottom in the neutral zone which showcases the presence of positive momentum.
Going ahead we expect the prices to move higher till the mark of Rs 1,200 where the stop-loss must be Rs 1,075 on a daily closing basis.
Expert: Om Mehra, technical analyst at SAMCO Securities
Natco Pharma: Buy | LTP: Rs 869.80 | Stop-Loss: Rs 825 | Target: Rs 945 | Return: 8.6 percent
The stock exhibits a robust bullish trend evident through the ongoing formation of higher highs and higher lows on the daily chart. Further supporting its upward trajectory, the stock is currently trading above its 50-day moving average (DMA).
The double bottom formation observed in weekly chart adds to the bullish sentiment indicating a potential space to inch higher.
The stock price is above the super trend reinforcing the strength for the upward direction. The RSI at 67 indicates the sustained upward movement in the stock.
A crucial aspect highlighted by the daily volume profile is the strong support of around Rs 830 levels. Hence, based on the above technical structure, one can initiate a long position at CMP Rs 869.80 for the target price of Rs 945. Stop-loss can be kept at Rs 825
GE Shipping: Buy | LTP: Rs 1,007.70 | Stop-Loss: Rs 960 | Target: Rs 1,110 | Return: 10 percent
The stock has recently emerged from a period of consolidation marked by higher volumes. Notably, the current price comfortably trades above the 20-day and 50-day moving averages signalling a positive trend.
The RSI is on an upward trajectory and is steady above the 64 level indicating sustained buying interest.
Elevated volume accompanies a rising price, affirming positive momentum. A Flag pattern adds further support while the stock is sustaining above the Cup and Handle breakout.
Hence, based on the above technical structure, one can initiate a long position at CMP Rs 1,007.70 for the target price of Rs 1,110. Stop-loss can be kept at Rs 960.
Expert: Vidnyan Sawant, HOD - Research at GEPL Capital
HFCL: Buy | LTP: Rs 105.75 | Stop-Loss: Rs 95 | Target: Rs 122 | Return: 15 percent
HFCL is currently trading at its all-time highs, signaling robust momentum. The stock has exhibited a resilient structural development, with the initial phase marked by a sharp rally, forming higher tops and higher bottoms since the low in March 2020. In the second phase, the stock underwent consolidation with decreased volume, establishing a base at the 100-week EMA.
In the current third phase, the stock has broken out of the contraction phase with notable volume participation, indicating readiness for a continued upward trajectory.
The ADX (average directional index) study stands at 31, and the +DI (directional indicator) is at 37 for the current week, suggesting the establishment of a strong uptrend. Additionally, the MACD (moving average convergence divergence) has experienced a breakout of the sloping trend line, reinforcing the momentum and supporting the ongoing upward trend in the stock.
Looking forward, there is an anticipation of further price ascent towards Rs 122 mark. It is recommended to set a stop-loss at Rs 95, strictly based on the closing basis.
BHEL: Buy | LTP: Rs 220 | Stop-Loss: Rs 204 | Target: Rs 250 | Return: 14 percent
BHEL has initiated a bullish surge, supported by a series of technical confirmations. The stock consistently forms higher tops and bottoms, indicating a sustained upward momentum. A significant development is the multiyear breakout in 2014, highlighting the stock's strong structural development.
This bullish sentiment is further confirmed by the ADX and DI indicators. With the ADX at 53, a well-established trend is indicated, and the +DI consistently above 30 emphasizes the strength of the positive momentum.
In addition, the stock confidently trades above crucial moving averages, including the 12-week and 26-week EMA. This alignment with the moving averages not only reinforces the positive momentum but also instills confidence in the stock's continuous upward trajectory.
Looking ahead, we anticipate further upward movement in prices, targeting Rs 250 level. It is recommended to set a stop-loss at Rs 204 based on closing values.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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