It appears that our market overreacted to the global development on December 21, but they also remained at the front in the recovery mode.
We managed to shrug off the negativity and restricted the correction to merely one and a half days. Although the fall was intimidating, it was merely a correction within the larger bull market.
We are now back to the record highs and this week would be quite crucial to understand whether Nifty is heading towards 14,000 or not.
A sustainable move beyond 13,780-13,800 would lead to the continuation of the move towards 14,000-14,200 levels.
On the flip side, 13,626 is the level to watch out for. If we again slide below this support, we may see some corrective move in the concluding week of the current calendar year.
Let's see how things pan out because the last week of the year is generally considered a muted one due to the absence of foreign institutional investors.
In the week gone by, the defensive spaces like IT, pharma and FMCG initiated the recovery, so it would be important to see what drives the market going ahead.
Here's one buy and one sell call for the next 1-2 weeks:
Biocon | Buy | LTP: Rs 481.25 | Target price: Rs 518 | Stop loss: Rs 458
Last week’s recovery was mainly led by the marquee defensive themes and pharma was one of them.
Due to last week’s smart up move, many counters from this space registered fresh record highs.
Biocon did not stay behind as we witnessed a good price-volume breakout last Wednesday from the multiple resistance zone around Rs 480.
A small pullback on the following day has made it more attractive when it comes to the risk-reward ratio.
Looking at the upward sloping RSI-Smoothened oscillator, we expect the stock to do extremely well after entering uncharted territory.
IndusInd Bank | Sell | LTP: Rs 850.95 | Target price: Rs 805 | Stop loss: Rs 874
This private bank stock has been underperforming significantly in pre-COVID times as well. However, we have witnessed some recovery in it over the last few months along with the broader market.
Last week, the stock saw some decent profit-booking, which was due for the recent rally.
The market did well after last Monday’s hiccups but this stock did not have enough strength to recover its losses.
The daily chart exhibits a bearish crossover in the combination of two key short-term moving averages i.e. 5 and 20.
We may see some further correction in the coming week as well.
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