The market recovered all its previous week's losses and rallied 1.2 percent to end at a record closing high on a weekly basis on February 16. Experts hope the momentum will continue in the coming weeks too, but with intermittent consolidation. According to them, if the Nifty 50 climbs above 22,127, the previous record high, and sustains the level, then 22,300 could be the next hurdle on the higher side, followed by 22,500, while the immediate support will be at 21,950, followed by 21,750.
The Nifty 50 closed at 22,040.70 in the week ended February 16, and formed bullish candlestick pattern with long lower shadow on the weekly charts, indicating buying interest at lower levels.
"The initial sessions of the current week will be crucial to gauge market reactions around the 22,100 - 22,150 zone. A continued upward trajectory beyond this range could signal the start of the next bullish phase, potentially opening doors for the 22,380 - 22,500 zone," Sameet Chavan, head research - technical & derivatives at Angel One said.
Conversely, he said that while dips may continue to be bought into, traders are warned against complacency, given recent instances of severe losses among aggressive traders around this zone.
Immediate support lies around 21,950, followed by 21,800, with crucial support in the 21,550 - 21,500 zone, from where prices rebounded last week, he said. Traders are advised to monitor these levels closely and adjust their trading strategies accordingly.
Jatin Gedia, technical research analyst at Sharekhan by BNP Paribas, is expecting the rangebound action to continue in the markets. "The inability to decisively cross the recent swing high of 22,150 can lead to a fall in the Nifty and hence caution is advised," he said.
Moneycontrol collated a list of 10 stocks from experts with 3-4 weeks perspective. The closing price of February 16 is considered for stock price return calculation.
Expert: Subash Gangadharan, senior technical and derivative analyst at HDFC Securities
Mastek: Buy | LTP: Rs 3,092 | Stop-Loss: Rs 2,850 | Target: Rs 3,450 | Return: 12 percent
Mastek is in a healthy intermediate uptrend as it has been consistently making higher tops and higher bottoms over the last few months. The 20-week SMA (simple moving average), too has been providing healthy support to the stock over the last several weeks.
While the stock has been consolidating in a tight range over the last few sessions, last week saw the stock bouncing back strongly from close to the 50-day SMA on the back of healthy volumes.
With momentum readings like the 14-day RSI (relative strength index) in rising mode and not overbought, the uptrend looks set to continue. We recommend a buy between Rs 3,080 and Rs 3,100 levels. Stop-loss is at Rs 2,850 while target is at Rs 3,450.
Ipca Laboratories: Buy | LTP: Rs 1,241.5 | Stop-Loss: Rs 1,150 | Target: Rs 1,370 | Return: 10 percent
Ipca Laboratories recently broke out of a two-month range. After a brief pullback which saw the stock finding support near the 20-day SMA, the stock rose sharply on Friday on the back of above average volumes.
With momentum readings like the 14-day RSI too in rising mode and not overbought, we expect the stock to move towards its previous intermediate highs in the coming weeks.
Buy between Rs 1,240 and Rs 1,248 levels. Stop-loss is at Rs 1,150 and upside target is at Rs 1,370.
Polycab India: Buy | LTP: Rs 4,670 | Stop-Loss: Rs 4,350 | Target: Rs 5,100 | Return: 9 percent
Polycab has reversed its recent intermediate downtrend. The stock recently touched a low of Rs 3,801. And from there the stock has gradually climbed higher and made higher tops and higher bottoms over the last few weeks. Last week, the stock crossed its previous intermediate high of Rs 4,549, thereby confirming reversal of the recent downtrend.
With the stock crossing the 20-day SMA and 200-day EMA (exponential moving average) last week and momentum readings like the 14-day RSI in rising mode and not overbought, we expect the stock to move towards its previous intermediate highs in the coming weeks.
Buy between Rs 4,630 and Rs 4,690 levels. Stop-loss is at Rs 4,350 and upside target is at Rs 5,100.
Expert: Shrikant Chouhan, head of equity research at Kotak Securities
Tata Communications: Buy | LTP: Rs 1,812 | Stop-Loss: Rs 1,750 | Target: Rs 1,940 | Return: 7 percent
After the downward trend from the levels of around Rs 1,950, the bearish trend took a pause. The counter was in a rangebound formation for quite some time, which had emerged as a strong base for reversal in the counter.
Recently the breakout from the symmetrical triangle chart formation on daily scale hints at strong upside movement in the coming trading sessions.
Coforge: Buy | LTP: Rs 6,665 | Stop-Loss: Rs 6,440 | Target: Rs 7,140 | Return: 7 percent
On the weekly scale, the counter is into a rising channel chart formation with higher high and higher low series pattern. After a sharp uptrend rally, the counter comfortably closed above its previous weeks high.
In addition, on daily charts the counter has formed bullish continuation chart formation, which indicates strong up move to persist in the near term.
Aditya Birla Capital: Buy | LTP: Rs 186 | Stop-Loss: Rs 179 | Target: Rs 200 | Return: 7.5 percent
Post decline from the higher levels, the counter rebounded from its demand zone and witnessed a steady recovery from the lower levels. Additionally, on the weekly charts, the counter has given a breakout from its sloping channel formation.
The up moves in the counter suggest a new leg of bullish trend from the current levels.
Expert: Om Mehra, technical analyst at SAMCO Securities
Mahindra and Mahindra Financial Services: Buy | LTP: Rs 289.5 | Stop-Loss: Rs 275 | Target: Rs 315 | Return: 9 percent
Mahindra and Mahindra Financial has undergone a consolidation phase for several weeks but is now displaying renewed momentum establishing a robust base in a larger time frame. The stock is emerging from the accumulation phase.
The relative strength index (RSI) at 55 suggests a neutral to bullish stance, signalling potential upward movement. Additionally, the stock consistently outperformed above crucial exponential moving averages (EMAs), including the 20-day and 50-day. The price continues to rise, and the accompanying volume provides support, reinforcing the positive sentiment surrounding Mahindra and Mahindra Financial.
Hence, based on the above technical structure, one can initiate a long position at LTP for a target price of Rs 315. The stop-loss can be kept at Rs 275.
Expert: Kushal Gandhi, technical analyst at StoxBox
Venus Pipes and Tubes: Buy | LTP: Rs 1,684 | Stop-Loss: Rs 1,540 | Target: 1,880 | Return: 12 percent
The pattern analysis on the daily timeframe shows that the price action has witnessed a bullish Cup and Handle breakout on a relatively strong volume series. The Cup and Handle pattern is a potential sign of trend continuation. The lateral trend within the range of 24 percent ahead of the breakout indicates potential smart hand participation to fuel the primary trend continuation on the upside.
We reckon a buy on Venus Pipes for a target of Rs 1,880 and a protective stop-loss at Rs 1,540.
eMudhra: Buy | LTP: Rs 484 | Stop-Loss: Rs 457 | Target: Rs 536 | Return: 11 percent
The pattern analysis on the daily timeframe shows that the price action has been trading in a volatility contraction pattern near to life-highs. The progressive contractions in price action by means of reducing price depth and time indicate the absorption of potential supply. These further strengthened the price action whilst trading in a lateral trend.
The stock offers lower risk against a higher monetary opportunity with pivotal support of Rs 459 as immediate support. We recommend a buy on eMudhra for the target of Rs 536 and stop-loss at Rs 457.
Wonderla Holidays: Buy | LTP: Rs 969 | Stop-Loss: Rs 894 | Target: Rs 1,130 | Return: 17 percent
Following an elongated consolidation phase, the price action shows tepid signs of surfacing out from the narrow range on relatively higher volume and improving momentum in the price thrust and relative strength compared to the 50 index.
The price action has also eventuated in a bullish breakout from the double-bottom pattern, a potential sign of trend reversal. The 50-period volatility remains at the lower end, which scales down the probability of any unruly moves. We reiterate a buy on Wonderla for a target of Rs 1,130 and stop-loss at Rs 894.
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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