The last week was a truncated one but we witnessed a lot of action in the market. Nifty settled at 16,450.50 on August 20.
Looking at the weekly close of the benchmark, one might think that there was not much damage despite a lot of uncertainty across the globe.
But if we closely observe individual stocks outside the IT and the FMCG spaces, brutal knocks are clearly visible.
There has been an onslaught on many counters in the derivatives space as well.
Such things can be deceptive because some of the other heavyweight baskets keep the index higher and this time it was defensive names like IT and FMCG.
The weekly chart of Nifty now exhibits a ‘Shooting Star’ candle which is an indication of some pause if the low of the candle is breached on a closing basis.
For this week, the cluster of supports at 16,350–16,250–16,150 should be observed closely.
As of now, there is no indication of Nifty sliding below the lower range of this support zone. But you never know how global developments pan out.
Nifty may gain strength only after convincingly surpassing the band of 16,500–16,600.
Also, the Bank Nifty and the Nifty Midcap 50 indices are trading at make or break levels. Since this week is the monthly expiry week, it would be interesting to see how things unfold.
Traders are advised to remain light for a while and the ideal strategy would be to look at the individual stocks rather than the benchmark index.
Here are two buy calls for the next 2-3 weeks:
Bata India | LTP: Rs 1,730.30 | Target price: Rs 1,845 | Stop loss: Rs 1,675 | Upside: 7%
This counter has been a steady mover for the last couple of weeks while the broader market has been under tremendous stress all the while.
Last week, we witnessed a breakout from the recent hurdles and the volume activity was quite decent to support the price action.
Besides, the weekly positioning of the stock is quite impressive and hence, we will not be surprised to see an outperformance.
United Spirits | LTP: Rs 701 | Target price: Rs 764 | Stop loss: Rs 682 | Upside: 9%
The liquor space had been quiet for the last couple of months but on August 18, all of a sudden we witnessed some vibrant moves in this basket.
United Spirits had been consolidating around its support and it suddenly took off to confirm its highest level in the last 18 months.
The massive bullish candle was accompanied by gargantuan volumes, indicating genuine buying interest in the counter.
Although there was some mild profit-booking on the following day, we recommend buying this stock for a short-term price target of Rs 764.
(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.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
