Exclusive Webinar :Don't miss the latest webinar on Global Investing with Passive Products on June 22, 11am

Brace for volatility in F&O expiry week, top 10 trading ideas for the next series

Volatility is expected to remain high this next as well due to the monthly derivatives contract expiry. Coronavirus updates and performance of global markets will be closely tracked, say experts.

March 22, 2021 / 09:55 AM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Bears remained in control of the market for the most part of the previous week, pushing the benchmark indices below their crucial supports as the S&P BSE Sensex closed below 50,000 and the Nifty below 15,000. The Sensex fell 1.8 percent and the Nifty 1.9 percent for the week ended March 19.

The market is likely to remain volatile this week, which is the F&O expiry week, as well. A Nifty breakout above 14,900-15,000 could result in some upside, while a break below 14,500 could fuel selling pressure, experts have said.

“We expect volatility to remain high next week due to the scheduled derivatives expiry of March month contracts. In absence of any major event, COVID-related updates and performance of the global markets will remain in focus,” Ajit Mishra, VP Research, Religare Broking told Moneycontrol on March 21.

Markets had been consolidating for six weeks and there was no clarity over the next directional move. The volatility is the result of a rise in the US bond yields, a spike in coronavirus cases in India and several other countries and profit-booking at higher levels that has kept traders on the edge.

Mishra said a decisive move above 14,900 in the Nifty might result in a further rebound else profit-taking would resume. On the downside, 14,500 would continue to act as critical support for the NIfty, Mishra said. Participants should focus on the selection of stocks and risk management.

Close

On technical charts, the Nifty closed below its 50-day moving average (DMA) and formed a reversal formation after completing the corrective move at 14,350 levels.

Even if the correction is completed, the current rally would be called a pullback until the Nifty crosses the 15,350 levels, experts said.

“The Nifty could go up to 14,850 and 149,50 levels. If the correction in bond yields continues, it could benefit the Bank Nifty. If inflation gets under control, FMCG stocks may also rise,” Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities told Moneycontrol.

For the Nifty, 14,600-14,450 would remain important supports. Investors could stick to a buy-on-dips strategy for the week. The Nifty formed a “bullish piercing pattern”, indicating it had absorbed heavy selling pressure and was ready to move higher, he said.

We spoke to various experts and here’s a list of top buy or sell trading ideas for the next three-four weeks:

Expert: Mehul Kothari, AVP – Technical Research, AnandRathi

Balrampur Chini Mills: Buy| LTP: Rs 202| Stop Loss: Rs 180| Target: Rs 240|Upside: 18%

At the beginning of March, Balrampur Chini confirmed a breakout from its multi-year high of Rs 200. The breakout occurred after a consolidation of 14 years.

The theoretical target for the same comes around Rs 340 in the longer run. However, in the short-term, the stock travelled above the Rs 225-mark and is again available near Rs 200 due to the correction.

Even for short-term traders, the current price offers a decent risk-to-reward for an upside of around 15-29 percent.

Thus, traders are advised to buy the stock in the range of Rs 202-198 with a stop loss of Rs 180 for an upside potential target of Rs 240 in the next three-five weeks.

Bank of Baroda: Buy| LTP: Rs 73| Stop Loss: Rs 66| Target: Rs 84| Upside: 15%

Following the rally in the entire PSU pack, Bank of Baroda saw a fantastic rally from Rs 64 to Rs 99 in a span of just three weeks. The stock corrected and is now again trading near the Rs 70-mark.

On the daily chart, it is trading near the previous demand zone. On the weekly scale, it is resting at Ichimoku support. The price action indicates that PSU banks are preparing for a fresh upside.

Thus, traders are advised to buy the stock in the range of Rs 73-71 with a stop loss of Rs 66 for an upside potential target of Rs 84 in the next three–five weeks.

Bharti Airtel: Buy| LTP: Rs 530| Stop Loss: Rs 510| Target: Rs 570| Upside: 7.5%

The stock recently corrected almost 100 points from the peak of Rs 623. At this juncture, it is hovering above the Ichimoku cloud support on the weekly scale with a hammer formation.

On the daily chart, it is consolidating above the placement of its 200-day exponential moving average (DEMA) and 200-day simple moving average (DSMA). The mentioned technical evidence indicates that the stock is poised for fresh upside with excellent risk-reward.

Thus, traders are advised to buy the stock at Rs 530 with a stop loss of Rs 510 for the upside target of Rs 570 for the next three–five weeks.

Expert: Shabbir Kayyumi, Head of Technical Research at Narnolia Financial Advisors Ltd.

Tata Motors: Buy| Buy around Rs 308|Target Rs 360| Stop Loss Rs 270| Upside 16%

Tata Motors spurted from a low of Rs 290 and formed a Hammer reversal candlestick pattern on the daily chart, indicating stability in the upcoming sessions.

The emerging line of polarity on the daily time frame chart is suggesting bullish momentum in the scrip. Indicators and oscillators are also showing conducive scenarios in the coming sessions.

Based on the mentioned technical structure, one can go long in the scrip around Rs 300 for the target of Rs 350 and Rs 380, with a stop loss of Rs 270.

ITC Limited: Buy| Buy around: Rs 223|Target Rs 260| Stop Loss Rs 205 | Upside 17%

This stock is trading above its crucial resistance of Rs 216 and ready to move to higher levels. At the same time, it has given a break out of rectangle pattern and the stock can touch 260 levels to achieve its targets.

At the same time, prices have given a trend line breakout on the upside with the expansion of bands on the daily chart, suggesting a continuation of the trend in the direction of the breakout.

It has been in a steady uptrend in the last few days with higher trough and crests as well.  Looking at the above rationale, traders can accumulate the stock for higher levels around Rs 222 with a stop loss of Rs 205 and a target of Rs 260.

Expert: Sameet Chavan, Chief Technical & Derivatives Analyst at Angel Broking

BPCL | Buy | LTP: Rs 432.95 | Target price: Rs 448 | Stop loss: Rs 418 | Upside: 3.5%

Overall, the entire PSU space has been buzzing for the last three months and this marquee OMC counter has been in limelight every now and then.

Price-wise, this stock seems to have a sturdy structure on the weekly time frame and looking at the lower degree chart, the recent price correction appears to be completed.

The stock managed to find support at the previous multiple resistance zone around Rs 424.

This coincides with the 89-day EMA as well and hence, we expect the stock to resume its upward trend.

We recommend going long on dips for a target of Rs 448 in the coming days.

Cadila Healthcare | Buy | LTP: Rs 426.70 | Target price: Rs 445 | Stop loss: Rs 407 | Upside: 4%

The entire pharma universe has been quiet for the last couple of months. In fact, many had undergone a decent price as well as time-wise correction.

This stock also saw a decent correction of nearly 20 percent from the recent highs.

A look at the daily chart shows prices rebounding after sliding a tad below their 200-day SMA. With the smart recovery on March 19, the daily close happened above this key moving average.

Also, the candle resembles a bullish hammer pattern. The possibility of some relief is very much on cards.

We recommend going long on a decline of around Rs 418 for a target of Rs 445 in the coming days.

Axis Bank | Sell | LTP: Rs 726.25 | Target price: Rs 700 | Stop loss: Rs 746 | Downside: 4%

The banking space has been the major culprit in all intermediate corrections and this time though the Bank Nifty has been underperforming the benchmark, this stock has managed to remain sturdy.

However, for the last few sessions, we are seeing some signs of fatigue that are clearly visible on charts as well.

The stock slipped below its recent consolidation range and although it has managed to recover a fair bit of lost ground on march 19, we expect the stock to face stiff resistance at around Rs 730 – 735.

Expert: SMC Global Securities Ltd

Pidilite Industries Ltd: Buy| LTP: Rs 1752| Target: Rs 1900| Stop Loss: Rs 1660| Upside 8%

The stock closed at Rs 1751.05 on March 19. It made a 52-week low at Rs 1185.55 on March 25, 2020 and a 52-week high of Rs 1842 on January 11, 2021.

The 200-DEMA of the stock on the daily chart is currently at Rs 1599.85. As we can see on charts that stock has traded sideways in a narrow range and formed a “Triangle” pattern on weekly charts, which is bullish in nature.

Last week, the stock gave the pattern breakout by registering gains around 2 percent and also managed to close above the same. So, a further upside is expected in the coming days.

One can buy the stock in the range of Rs 1,720-17,30 for an upside target of Rs 1,900-1,940 with a stop loss below Rs 1,660.

UPL Limited: Buy| LTP: Rs 625| Target: Rs 680| Stop Loss: Rs 570| Upside 8%

The stock hit a 52-week low of Rs 240.15 on March 23, 2020, and a 52-week high of Rs. 639.55 on March 16, 2021.

The 200-DEMA of the stock on the daily chart is placed at Rs 506.30. The short, medium and long-term biases are looking positive for the stock as it is trading in higher-highs and higher-lows on charts.

It also formed a “Symmetrical Triangle” pattern on the weekly charts and has given a breakout from the pattern along with high volumes.

So, the buying momentum may continue in the stock, which can be bought in the range of Rs 615-620 for the upside target of Rs 680-700 and a stop loss can be placed below Rs 570.

Disclaimer: The views and investment tips expressed by 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.
Kshitij Anand is the Editor Markets at Moneycontrol.

stay updated

Get Daily News on your Browser
Sections