The market has been in a narrow range for over a month now. If we take a glance at the intra-month movement, we can see Nifty trapped in a slender range of 500 points.
The monthly chart now exhibits two back-to-back ‘Doji’ candles with very small upper and lower shadows. This is a sign of consolidation and the market seems unsure of this direction.
In such a scenario, one should avoid taking any directional view till the time we do not get a range breakout on either side.
Considering the historical trend, the month of August is known for bigger moves. So it would be interesting to see whether history repeats itself or not.
As far as levels are concerned, 15,850, followed by 15,950 are the levels to watch out for and on the other hand, the sacrosanct support is placed at 15,550–15,450.
If the breakout happens on the upside, then we may not see a bigger move, but if it happens downwards, then brace yourself for some tough time.
In the last fifteen months, the market has not experienced any meaningful correction and has been enjoying a strong bull run.
If we see a convincing breakdown below 15,450, then a decent correction is possible.
Till the time the market is stuck in a range, one should take one step at a time and continue with the stock-specific approach by following a proper exit strategy.
Here are two buy calls for the next 2-3 weeks:
Bharti Airtel | LTP: Rs 561.65 | Target price: Rs 592 | Stop loss: Rs 540 | Upside: 5%
In the last six months, we have not seen major action in this telecom giant. After clocking its record high in early February, it underwent some price correction.
The fall got arrested after meeting the 200-day simple moving average, placed at Rs 520 and then the long consolidation began.
It made several attempts for a breakout but all efforts failed. We may call it a good base-building process.
Finally, the stock is now out of its slumber. In the last week, we witnessed a price-volume breakout, indicating further upside in the offing.
The fertilizer space has done well in the last few months and this stock has outperformed some of its larger peers by a fair margin.
The recent up-move in the stock was followed by a brief consolidation within the triangle configuration.
Last Friday, the entire space was buzzing after some favorable news flow and in the process, we witnessed a decent uptick in this stock to confirm a bullish pennant pattern on the daily timeframe chart.
(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.
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