Nifty has filled the gap levels in the range of 11,275-11,400, witnessing minor pullback from the high point of the week with derivatives expiry being in focus.
The June quarter results are in line with expectations and we have not witnessed any major negative price reaction post the numbers.
Mid-cap companies could continue to remain in focus as most of the large-cap companies have declared their numbers.
Nifty has closed at 8-day low at 11,102 and on the downside, the band of short and long-term averages placed at 10,920-10,860 will act as support while on the higher side, multiple resistances at 11,400-11,500 could cap the upside.
We expect some consolidation at the current level with time-wise correction. The breakdown below the 200-day average could trigger sharp profit-booking.
Bank Nifty is a laggard and it has witnessed a sharp reversal from its double top of 23,150 levels it tested in the month of July 2020.
On the monthly charts, it has closed in a Doji candle and the credit policy in the next week would be key to watch for the next leg of move from current levels.
Here's one sell and two buy calls for the next 3-4 weeks:
Cadila Healthcare | Buy | LTP: Rs 366.10 | Target price: Rs 410 | Stop loss: Rs 320 | Upside: 12%
The stock has closed in an inside range of the previous month candle with positive momentum on daily charts with the sector at a 3-year high.
Weekly RSI has crossed from its average line, indicating a strong breakout and the sector is also in positive momentum.
Multiple support levels in the range of Rs 335-345 levels offer a good risk-reward ratio from the current levels.
ICICI Bank | Buy | LTP: Rs 345.40 | Target price: Rs 400 | Stop loss: Rs 320 | Upside: 16%
ICICI Bank has closed near its 200-week average support and we have seen it bounce from these levels in the past.
The recent correction after results is a good entry point to accumulate the stock as the risk-reward is in favour with a stop loss of Rs 320 levels on the downside being its 55-month average level.
The current up-move may make it test its 100-week average placed near Rs 400 over the next few months.
Hindalco Industries | Sell | LTP: Rs 161.10 | Target price: Rs 133 | Stop loss: Rs 173 | Downside: 17%
The stock has failed to cross its 50-week average and witnessed a breakdown over the last few days from the high of Rs 170.
Trend reversal and RSI turning downwards from the top could trigger a sharp correction to test the lower range.
As per the current setup, we believe the stock will remain in pressure for the next couple of weeks.
(The author is Senior Research Analyst at Reliance 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.