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Benchmarks eye record highs: 10 technical recommendations by experts for next 3-4 weeks

Some factors that are supporting the market are a fall in daily COVID cases, surplus transfer from the Reserve Bank of India to government, strong corporate results, and stable global markets

May 24, 2021 / 10:50 AM IST
 
 
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Nifty50, which rallied by over 3 percent during the week ended May 21, is just 1.6 percent away from February's high of 15,431.

Technically, the benchmark index has surpassed crucial resistance levels, and as we step in the May expiry week chances of a breakout above 15,431 are high as long as Nifty50 holds above 15,000 (a crucial support).

The index finally managed to break out of the consolidation phase and end the past week beyond the key cluster of resistance i.e. 15,050.

“Traders should now watch out for a sustained trade beyond 15,100 for a move towards 15,350-15,430. Moreover, a bullish crossover between 20-DMA (daily moving average) and 50-DMA suggests that the intermediate trend has turned bullish and it’s a matter of time before the index hits 15,400 levels,” Aditya Agarwala, Senior Technical Analyst, YES Securities said.

Some factors that are supporting the market are a fall in daily COVID cases, surplus transfer from the Reserve Bank of India to government, strong corporate results, and stable global markets.

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But May F&O expiry could add some volatility.

“The way things are placed, retesting the record high of 15,431.75 looks eminent. Before this, 15,220 – 15,340 are the levels to watch out for. On the flip side, it is important to note that the immediate base has shifted higher towards 15,000 – 14,900, which is an encouraging sign,” Sameet Chavan, chief analyst-technical & derivatives, Angel Broking said.

Moneycontrol has collated a list of 10 trading ideas as recommended by experts in the current market scenario:

Ashish Chaturmohta, Head of Derivatives and Technical Analysis, Sanctum Wealth Management

SBI: Buy| LTP: Rs 401| Target: Rs 480| Stop Loss: Rs 375| Upside 19%

SBI's listed subsidiaries like, SBI life insurance and SBI cards are very well placed and enjoy a good position in its competitive landscape.

Meanwhile, in the March quarter, SBI reported slippages of Rs 21,934 crore in FY21 and pro forma slippages in 9MFY21 were Rs 16,461 crore, implying new slippages of Rs 5,473 crore in 4QFY21, which was very much below Street expectations.

This gives us more confidence in the asset quality which was worsening since the last 12-10 quarters. Technically, SBI has seen a major multi-year consolidation between Rs 350 and Rs 140 odd levels.

It witnessed a breakout in February. The immediate target for the stock is seen at Rs 480 and then Rs 520. On the downside, Rs 375 can be kept as a stop loss for the stock.

BPCL: Buy| LTP: Rs 461| Buy above Rs 480| Target: Rs 550| Stop Loss: Rs 430| Upside 14%

Potential strategic divestment by the government, refining margin revival from FY22, and a longer-term volume kicker from Mozambique LNG are the key positives for the company.

The Street is expecting high dividends from the stock post Rs 22 dividend announced by HPCL. Technically, the stock has formed an ascending triangle over the last year on weekly charts between Rs 480 and Rs 250 odd levels.

Recently, a low has been formed at a 200-Days moving average which has been acting as a support for the stock. A breakout above Rs 480, could take the stock initially towards Rs 550 and then towards Rs 600 levels. On the downside, 430 can be kept as a stop loss for the stock.

Axis Bank: Buy| LTP: Rs 730| Target: Rs 835| Stop Loss: Rs 680| Upside 14%

Post the STUTI stake sale, a big overhang on the stock will take a back seat and some rally can be witnessed.

Price-wise, after two months of correction, the price has seen a bounce back. Volumes have been high suggesting buying participation in the stock.

It formed a bullish inverted head and shoulders pattern in the short-term time frame to give a breakout above the pattern. The immediate level for the stock is seen at Rs 800 and then towards Rs 835. On the downside, the recent low of Rs 680 can be kept at stop loss.

Jubilant FoodWorks: Buy| LTP: Rs 3019| Target: Rs 3280| Stop Loss: Rs 2900| Upside 8%

The stock has seen consolidation between Rs 3,050 and Rs 2,700 odd levels for the last 10 weeks. It has formed a base and the price is at breakout level.

If it crosses and sustains above Rs 3,050, the stock can rally towards Rs 3,280 and then Rs 3,400 levels. On the downside, Rs 2,900 can be kept as a stop loss for the stock.

Aditya Agarwala, Senior Technical Analyst, YES SECURITIES

Shriram Transport Finance: Buy| LTP: Rs 1479| Target: Rs 1670| Stop Loss: Rs 1370| Upside 13%

The stock has broken out from a Pennant pattern consolation resuming the uptrend. Further, a bullish crossover between 20-DMA and 50-DMA confirms the bullishness.

Moreover, RSI has formed a positive reversal pattern suggesting higher levels in the coming trading sessions.

City Union Bank: Buy| LTP: Rs 175| Target: Rs 190| Stop Loss: Rs 167| Upside 8%

The stock has turned upwards after taking support at the lower end of the channel support suggesting bullishness.

Further, on the daily chart, it has taken support at the key short-term moving averages confirming bullishness.

PNC Infratech Ltd: Buy| LTP: Rs 249| Target: Rs 270| Stop Loss: Rs 235| Upside 8%

The stock has turned upwards after taking support at the lower end of the bullish Flag pattern suggesting bullishness.

Further, on the weekly chart, it has taken support at the trendline in its throwback from which it had broken out previously confirming bullishness.

Oberoi Realty: Buy| LTP: Rs 611| Target: Rs 700| Stop Loss: Rs 565| Upside 14%

The stock has broken out of a Triangle pattern resistance triggering the resumption of the bull trend. Moreover, on the monthly chart, it is on the verge of a breakout from the cluster of previous all-time highs placed between 630-640, a successful breakout on volumes will extend the uptrend.

Sameet Chavan, chief analyst-technical & derivatives, Angel Broking.

Piramal Enterprises: Buy| LTP: Rs 1728| Target: Rs 1835| Stop Loss: Rs 1668| Upside 6%

After seeing a spectacular recovery from March 2020 fiasco, the stock finally took a breather around the ‘200-SMA’ on the weekly chart. The stock prices underwent some time-wise as well as price-wise correction over the past three months.

However, looking at the past few weeks’ price action, it appears that the stock has cemented its position around the previous breakout point of 1600. This coincided with the rock-solid support zone of the weekly ’89-EMA’ as well.

On Friday, we witnessed the first sign of strength as we saw a breakout on the smaller time frame charts. Looking at this evidence, we recommend going long for a target of Rs.1835 in the coming days. The strict stop loss can be placed at Rs.1668.

Jamna Auto Industries: Buy| LTP: Rs 77| Target: Rs 88| Stop Loss: Rs 69| Upside 14%

This auto-ancillary stock has been one of the rank outperformers over the past few months. We have been witnessing a series of higher highs higher lows in all time frame charts.

Recently, most of the larger names within the ‘Auto’ universe have undergone a decent price correction; but this stock chose to move sideways rather than participating in the corrective phase.

Now on Friday, it just took off and managed to traverse the recent congestion with ease. Looking at the volume activity, we may see this stock knocking on the doors of the three-digit mark very soon.

For Momentum traders, we recommend buying on a dip towards 75 – 73 for a target of Rs.88 in the coming days. The strict stop loss can be placed at Rs.69.
Kshitij Anand is the Editor Markets at Moneycontrol.

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