The market started the previous week on a positive note and the Nifty continued its winning streak, marking new milestones. During the first couple of sessions, the index made fresh by going past 17,400 but failed to close above it. In the latter half, there was a hint of profit-booking but the bulls came back to push the index above 17,350 to mark its highest ever weekly close.
The price action in key indices was extremely dull as the market witnessed one of the thinnest weekly trading ranges for a long time. Though the Nifty looked a bit uncomfortable around 17,400, the market did not see any major weakness overall.
As of now, bulls have a firm grip on the market but as we have mentioned, they would find it a bit difficult going ahead. We reiterate the observations for being slightly cautious. They are, 1) we can see Nifty reaching the 200 percent 'Fibonacci Retracement' of the last year's massive decline from January 2020 high to March 2020 low, 2) Time-wise, Nifty has entered 7th zone as per ‘Fibonacci Time Series’ on the monthly time frame chart.
It may seem contradictory to adopt a cautious stance when the market is making new highs but these observations have proved their efficacy in the past and hence cannot be overlooked.
As far as levels are concerned, 17,450–17,500 would now be seen as a sturdy wall, whereas on the flip side, the first sign of weakness would come only after confirming a single day close below the support zone of 17,300 – 17,250.
We advise traders to continue with a stock-centric approach by following strict stop losses and booking timely profit.
Here are two “buy” recommendations and one “sell” call for the next two-three weeks:
Marico | LTP: Rs 575 | Stop Loss: Rs 558 | Target: Rs 605 | Upside: 5.2 percent
The Nifty FMCG index is having a good run for the last two months but this stock started its upward rally a couple of months earlier, in May. After a pause of nearly four months, the stock price suddenly took off once it surpassed the stiff hurdle around Rs 430.
Since then, there has been no stopping this counter as it defied its image of being a slow mover. We recommend buying the stock for a short-term target of Rs 605. The stop loss can be placed at Rs 558.
IIFL Wealth Management| LTP: Rs 1,674.75 | Stop Loss: Rs 1,590 | Target: Rs 1,820 | Upside: 8.7 percent
Price-wise, the data is limited but we can still see it forming some interesting patterns. On the daily time-frame chart, we can see stock prices confirming a price and volume breakout from the multiple resistances zone to trade at fresh record highs.
Traders are advised to buy the stock for a short-term target of Rs 1,820. The stop loss can be placed at Rs 1,590.
Bajaj Finance| LTP: Rs 7,430.65 | Stop Loss: Rs 7,600 | Target: Rs 7,340-7,300 | Downside: 1.2-1.8 percent
This stock is in a different league and has proved its worth over the last decade or so. All significant declines over the years have been bought into and this stock has not disappointed even once. Taking a glance at the recent performance, we can see stock prices taking off in the latter half of August after undergoing a small patch of consolidation.
The higher degree trend undoubtedly remains strongly bullish but the stock price behaviour over the past couple of weeks indicates some exhaustion. Last week, too, the stock was recommended but did not have any major price action during the week. Hence, we reiterate selling the stock on a bounce around Rs 7,470-7,500 for a target of Rs 7,340 – 7,300. The strict stop loss to be kept at Rs 7,600.Disclaimer: The views and investment tips expressed by 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.