Q) It was a steady week for markets. What were the contributing factors? On July 24, we also saw some profit-taking.
A) The Nifty50 witnessed another week of gain registering sixth consecutive gains on a weekly basis. So far, the trend remains positive, and equity demand remains stable despite the rise in COVID-19 infections.
The weekly gain was led by the quarterly numbers that were announced during the week and were better than expected, with companies coming out with a positive outlook.
Reliance Industries stock performance boosted the benchmark indices and helped limit further losses, while financials led the losses.Q) The Nifty50 climbed 11,200 levels in the week gone by but now it is approaching crucial resistance levels. What are the important levels to track in the coming week amid F&O expiry?
A) The Nifty50 has been respecting its rising support trend line by connecting all the recent swing lows and is holding above the 200-day EMA. The supports are shifting higher. The short-term trend of the Nifty is range-bound with a positive bias.
Having placed at the hurdle of 11300, there is a possibility of a minor downward correction during the week. A sustainable move above 11,250-11,300 levels could pull the Nifty towards 11,550-11,600.
The support for the Nifty is now placed at 11,100 and 11,050.Q) Small & Midcaps underperformed in the week gone by. Did investors prefer to book profits?
A) The present bullish movement in the market is mainly attributable to heavyweight stocks and no such tremendous movement has been seen across the sectors barring few specific stocks.
The above mentioned heavyweight stocks seem to be attracting all the money from the market and it is only natural that midcap space may see profit booking.
The benchmark indices seem bloated as of now and correction is very much possible, which will give an ample opportunity for value buying.Q) Sectorally, what is driving the rally in the energy sector, banks and the financial space?
A) The proposal of the government to divest in these sectors seems to be the driving force in these segments along with positive earnings reported by banks, which has further driven these segments.
The prospect of government disinvestment and hope for better management and business policies in such divested companies are being positively perceived by the D-street, also the end of the moratorium is near and hence banking and NBFCs may see cash flows, which are fuelling optimism in this segment.Q) The bulls pushed the gold price to record highs. Is it too late to buy now? If not, what is the kind of percentage that one can hold in the portfolio?
A) The factors like an increasing number of cases, a roller coaster in Indian equity indexes, rising crude oil prices and the demand for safe-haven metal may have forced investors to look at other alternatives to invest, which may be safe and perform well during uncertain economic conditions.
The above factors may have to lead the rally in the gold. Looking at the monthly chart, gold rallied around 25 percent from the low of 38,400 in March 2020. Investors need to wait for a correction (or a dip) to invest in gold.Q) Any trading ideas that investors can look at for the next three to four weeks?
A) Here is a list of four stocks that can give 10-17% return in the next 3-4 weeks:Aarti Industries: LTP: Rs 950| Buy above Rs 960| Target: Rs 1,050| Stop Loss: Rs 890| Upside 10%
After consolidating in a narrow range, the stock is ready to witness bounce back. On the daily chart, the stock is in a bullish trend. The RSI is at 58, which is indicating a chance for a bullish trend.
We recommend buying the stock above Rs 960 for the target of Rs 1,050, keeping a stop loss at Rs 890 on a closing basis.MCX: LTP: Rs 1,501| Buy above 1,535| Target: Rs 1,650| Stop Loss: Rs 1,440| Upside 10%
The stock is trading at a near resistance level of Rs 1,530. Any breakout above this level may lead to a bullish trend in the near future. A breakout from Rs 1,530 will lead see the stock witnessing more upward movement.
We recommend buying the stock above Rs 1,535 for a target of Rs 1650, keeping a stop loss at Rs 1,440 on a closing basis.Jubilant Life Sciences: LTP: Rs 752| Buy above 760| Target: Rs 880| Stop Loss: Rs 670| Upside 17%
The stock is sustaining on major moving averages on daily charts and on the weekly chart, the stock is in the bullish trend. Along with this, the stock is also witnessing moving average crossover that will further strengthen the bullish movement. Considering the technical evidence discussed above.
We recommend buying the stock above Rs 760 for the target of Rs 880, keeping a stop loss at Rs 670 on a closing basis.IPCA Laboratories: LTP: Rs 1,781| Buy above 1,845| Target: Rs 2,000| Stop Loss: Rs 1,780| Upside 12%
The stock had recently witnessed its all-time high at Rs 1,844 and had been in the bullish trend. And, a breakout above the level of Rs 1,844 can lead to a new high. Further, the stock has taken support at its key moving average.
We recommend buying the stock above Rs 1,845 for the target of Rs 2,000, and keep a stop loss at Rs 1780 on a closing basis.
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