The stock markets rallied for the second consecutive time in the week ended December 10 as bulls retained their control over Dalal Street, backed by a more-dovish-than-expected monetary policy by the central bank and the easing of Omicron concerns.
The Nifty 50 initially fell below the 17,000 but held on to the 16,900 level twice. The index gained momentum and ended the week at 17,511.30. Experts said the Nifty must surpass 17,600-17,700 to get a strong hold over the street.
“If we analyse the last two days’ trading activity, buying was definitely seen on intraday dips,” said Sameet Chavan, chief analyst-technical and derivatives, at Angel One. “However, we did see some tentativeness at higher levels as the benchmark has already rallied more than 3 percent from the intra-week low and has reached a cluster of resistance in the vicinity of 17,500-17,600-17,700.”
While the market participated in the relief move last week, directionally there was some scepticism over whether it was strong enough to surpass the higher boundary of this range, Chavan said. He advice is to now start lightening up longs if the Nifty extends the relief move in the coming sessions.
On the flip side, “we sense the base has shifted higher and the bullish gap left on Wednesday at 17,250-17,300 is to be seen as a key support,” said Chavan.
Traders can continue with a stock-centric approach, he said. However, they need to be very selective as the index approaches the resistance zone.
Here are 12 trading ideas by experts for the next 3-4 weeks. Returns are based on December 10 closing prices:
Vinay Rajani, senior technical and derivative analyst at HDFC Securities
Minda Industries: Buy | LTP: Rs 942 | Stop-Loss: Rs 890 | Target: Rs 1,025 | Return: 8.8 percent
The stock has resumed its primary uptrend after a running correction. The stock price has taken support at its 50-day EMA (exponential moving average) and turned north.
It has almost reached its all-time high of Rs 985. It has been forming higher tops and higher bottoms on the daily chart. Indicators and oscillators have shown strength in the current up-move.
Indian Overseas bank: Buy | LTP: Rs 22.85 | Stop-Loss: Rs 21 | Target: Rs 26 | Return: 13.8 percent
The stock has broken out from a symmetrical triangle with a jump in volumes on the daily chart. Public sector banks have started getting traction again. The stock has confirmed the higher top and higher bottom on the daily chart.
Indicator and oscillators including the ADX (average directional index), RSI (relative strength index) and MACD (moving average convergence divergence) have turned bullish. The stock price has formed a rounding bottom formation on the short-term chart.
CCL Products: Buy | LTP: Rs 408.10 | Stop-Loss: Rs 382 | Target: Rs 460 | Return: 13.7 percent
The stock has broken out from a downward sloping trend line on the daily chart, accompanied by a jump in volumes.
The stock has been finding support at around its 100-day EMA. It is on the verge of breaking out from a consolidation that has held for the past five months.
Expert: Vijay Dhanotiya, Lead Technical Research at CapitalVia Global Research
Bajaj Auto: Buy | LTP: Rs 3,344.75 | Target: Rs 3,495 | Return: 4.5 percent
The stock has been making a flag pattern on its intraday chart and is showing signs of recovery after a significant correction. One can see an ascending triangle on its daily chart along with a reversal from the support level.
The Nifty Auto index is also seen reversing from its support level, which is expected to add to the momentum. The level of Rs 3,360 seems to be a resistance and a breakout above this level is expected to start a fresh rally.
Muthoot Finance: Buy | LTP: Rs 1,491.95 | Target: Rs 1,580 | Return: 5.9 percent
The stock bounced back from its support level on its daily chart and is consolidating. On the weekly chart, it formed a Doji candle and resistance seems to be at Rs 1,515, above which a breakout may start a fresh rally.
The Bank Nifty has formed a strong weekly candle and we expect it to aid the momentum in the stock.
Grasim Industries: Buy | LTP: Rs 1,749.20 | Target: Rs 1,831 | Return: 4.7 percent
The stock has formed a flag pattern on its intraday chart and is signaling a reversal on its daily chart by forming a double-bottom pattern. Rs 1,760 seems to be a resistance level as of now and a breakout above this level is expected to start a fresh rally.
On its weekly chart, the stock has formed a strong bullish candle, indicating strength in the stock.
Expert: Pushkaraj Sham Kanitkar, VP (Equities) at GEPL Capital
Adani Enterprises: Buy | LTP: Rs 1,740.40 | Stop-Loss: Rs 1,606 | Target: Rs 2,020 | Return: 16 percent
The price chart has been in a rectangular consolidation pattern since June 2021. The upper and lower boundaries between Rs 1,700 and Rs 1,390 have been retested many times as a continuation to the earlier uptrend from Rs 500 in February 2021.
The 100-DMA (daily moving average) marked by the violet line has been respected all through with multiple touch points in the current financial year.
The uptrend has legs to take it to the pattern projection target of Rs 2,020. A stop-loss needs to be kept at about Rs 1,606, a bit below the recent swing low.
CDSL: Buy | LTP: Rs 1,529.45 | Stop-Loss: Rs 1,450 | Target: Rs 1,750 | Return: 14.4 percent
The price chart of CDSL has formed a five-month-long cup & handle continuation pattern with the horizontal boundary acting as a strong resistance at Rs 1,520-Rs 1,550. A daily close above Rs 1,550 will confirm the breakout from this pattern with a possible target of Rs 1,750.
The chart pattern price target of Rs 2,060 may also be a likelihood, which can push the stock to all-time highs. An initial stop-loss should be placed at below Rs 1,450.
IDBI Bank: Buy | LTP: Rs 53.95 | Stop-Loss: Rs 47 | Target: Rs 66 | Return: 22 percent
IDBI Bank has shown a stupendous rise in September-October, advancing to Rs 65 from Rs 36. The gain met with a good correction wherein prices retested the 100-DMA recently at about Rs 44.
The closing bar uptick shows a bullish momentum build-up on the back of huge volumes to the tune of 3x above average. The chart pattern indicates it has legs to retest the recent high of about Rs 66, with an outside possibility of a price target of Rs 95, a five-year high. An initial stop-loss should be placed at below Rs 47 (high volume bar low).
TCS: Buy | LTP: Rs 3,636.80 | Stop-Loss: Rs 3,450 | Target: Rs 4,000 | Return: 10 percent
TCS has been in a rational uptrend for more than a year with a surge in August-September pushing it to Rs 4,000 from Rs 3,100. It has formed a corrective hinge at about Rs 3,400 levels, wherein prices not only respected the 100-DMA, but formed a bullish momentum play.
Further, the chart pattern opens to a price target of Rs 3,960-4,000, which can push the stock to an all-time high. An initial stop-loss should be placed at a level below Rs 3,450.
Expert: Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities
Balrampur Chini Mills: Buy | LTP: Rs 334.60 | Stop-Loss: Rs 315 | Target: Rs 380 | Return: 13.6 percent
The stock has hit a high of Rs 301.60 and is rapidly recovering. Throughout the week, we saw momentum in the sugar sector.
Technically, the stock is still below the 20- and 50-day SMA. However, given the momentum in the sector, there are many possibilities to cross it. Buy at the current level with a stop-loss at Rs 315.
ITC: Buy | LTP: Rs 236.10 | Stop-Loss: Rs 229 | Target: Rs 260 | Return: 10.1 percent
On a daily basis, the stock has broken the decisive falling trend line at Rs 230. Above the trend line, it has big hurdles at Rs 245 and Rs 260.
On Friday, the stock narrowed activity, which would act as a continuation formation. It is a buy at the current level for a target of Rs 260 with minor resistance at Rs 245.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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