Nifty gained 0.82 percent last week led by handsome gains of 4.52 percent in Nifty IT. The Nifty Midcap 50 index also added another 2.57 percent to its kitty. However, the banking index remained laggard losing over half a percent.
If Nifty has to reach the milestone of 16,000 and move beyond it, Bank Nifty needs to surpass the sturdy wall of 36,000. If it fails to do so, we may see some profit-booking this week.
The key support for Nifty is at 15,700–15,550, whereas 15,850–15,900 are immediate resistances.
The Nifty Midcap 50 index has now reached a crucial juncture. On the daily chart, we can see it reaching the 100 percent price extension of the previous up move and on the weekly timeframe, we can see it coinciding around the 161 percent price extension of the first up move started after March 2020 lows.
We do not expect the multi-year bull run to end, but at least a short-term pause or profit-booking cannot be ruled out.
Hence, traders are advised to take some money off the table and avoid aggressive bets overnight. The stock-specific approach still can be continued but one has to be very fussy and should follow proper risk management from hereon.
Here's one buy and one sell call for the next 2-3 week:
Caplin Point Laboratories | Buy | LTP: Rs 656 | Target price: Rs 750 | Stop loss: Rs 609 | Upside: 14%
The pharma space did exceedingly well last Friday and some of these mid-cap names were completely on a roll.
This stock saw some renewed buying interest in the latter half of the last week. On Friday, we witnessed a smart surge in the counter along with sizable volumes.
It closed at its highest level in three years. The intensity, at which this breakout has come, indicates the beginning of the next leg of the rally.
Balkrishna Industries | Sell | LTP: Rs 2,249.50 | Target price: Rs 2,130 | Stop loss: Rs 2,316 | Downside: 5%
This tyre manufacturing company has given a colossal rally in the last 14 months and has outperformed its peer counters by a fair margin.
Although the higher degree trend remains strongly bullish, we can see some fatigue in the stock prices as they have started to lose momentum over the past few sessions.
Last Thursday, we witnessed a shooting star pattern which is a sign of exhaustion in prices and the said pattern got confirmed on the subsequent session as the stock prices closed below the low of the pattern.
Considering these factors, a short-term profit-booking in this stock cannot be ruled out.
(The author is Chief Technical & Derivatives Analyst at Angel Broking)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.