On December 7, Nifty registered a new all-time high at 13,366, which is 78 percent higher from the level of 7,511, the March 2020 Low of Nifty.
The benchmark index took just eight-and-a-half months to register a rise of 78 percent, which is remarkable.
Nifty is now almost 1,000 points up from the previous all-time level of 12,430, registered in January 2020.
However, the Nifty Smallcap index is still down 30 percent from its all-time high, registered in January 2018.
The Nifty Midcap index is also yet to cross its previous high and is trading down 8 percent from that level.
There is a good chance that investors could get a return from here as well. The only thing required is the selection of good quality stocks from the midcap space.
At present, more than 88 percent of the Nifty stocks have reached above their respective 200-DMA. This extreme reading indicates an overbought scenario for largecaps in the short term.
The benchmarks are likely to pause the rally after a couple of percentage of addition.
However, if we see the NSE500 universe, 81 percent of the stocks are above their 200-DMA, which is also a high reading but still lower than the bullish scenario of the year 2017 and 2014.
The number of 52-week highs from NSE500 is also lower than that of the year 2017 and 2014.
So, as far as midcaps and smallcaps are concerned, steam is still left. The focus should be on buying quality mid-cap and small-cap stocks.
For Nifty, the immediate target is seen at 13,590, which happens to be the 123.6 percent retracement of the entire fall seen from 12,430 (Jan 2020 top) to 7,511 (March 2020 bottom).
Far targets are seen at 14,300-odd levels, where 138.2 percent retracement levels are placed.
As far as support is concerned, 13,145 and 12,950 are two crucial levels to watch out for.
Here are three buy calls for the next 2-3 weeks:
The stock is on the verge of registering a new all-time high above Rs 2,560. The stock price has broken out from the downward sloping trendline, adjoining the previous two major tops on the weekly charts.
The stock is placed above all important moving averages, indicating a bullish trend on all timeframes.
It has also registered a breakout from the flag pattern, which indicates the continuation of an uptrend.
The stock has broken out from the last three week’s consolidation phase.
It surged more than 3 percent on December 7 with a significant jump in volumes.
Asset management companies have started getting traction recently.
Short-term moving averages have crossed over medium to long-term moving averages in the recent past.
The stock has reclaimed a level above its 200-day EMA.
L&T Technology Services | LTP: Rs 1,836 | Target price: Rs 2,020 | Stop loss: Rs 1,730 | Upside: 10%
The stock is on the verge of registering a new all-time high above Rs 1,872.
In the week gone by, the stock closed at the highest level on the weekly basis and broke out from the long consolidation which held for 7 consecutive weeks.
The stock has also broken out from the downward sloping trendline, adjoining previous major tops.
(The author is a technical research analyst at HDFC Securities)
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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