The market looked a bit tentative in the first half of the last week, especially the broader market, as we witnessed a healthy correction in the Nifty Midcap50 index.
At one point, it was on the cusp of violating recent swing lows but fortunately, it got its mojo back and managed to recover a fair bit of ground towards the end.
Going ahead, things are going to get tougher because from hereon we are likely to see a lot of sector churning every now and then.
Nifty has reached 16,500 without the participation of the banking space. It would be interesting to see how things pan out going ahead.
Also, it would be unfair to expect a similar pace from Nifty to reach new milestones.
There is no sign of weakness but we reiterate when things start to look hunky-dory everywhere, wise traders choose to take some money off the table
We second this as we advise continuing with a 'one step at a time' approach and keep booking timely profits in the rally.
As far as levels are concerned, support is placed at 16,200 – 16,170 and 16,400 – 16,300.
On the upside, it’s hard to project any level as we have entered uncharted territory. Still, every 100 points rally from hereon should be treated as the upside range.
Here are two buy calls for the next 2-3 weeks:
Larsen & Toubro (L&T) | LTP: Rs 1,665.05 | Target price: Rs 1,740 | Stop loss: Rs 1,624 | Upside: 5%
After March 2020 mayhem, a lot of stocks started to see excellent recovery. However, this heavyweight counter had been muted for some time. From November, the momentum started to pick at a rapid pace.
Since then we have been witnessing decent buying interest.
In the last couple of sessions, this marquee has been one of the major stocks that sent Nifty beyond 16,500.
It has reached its new highs and the daily chart now exhibits a small rectangle pattern breakout.
Amara Raja Batteries | LTP: Rs 727.95 | Target price: 776 | Stop loss: Rs 702 | Upside: 7%
This stock has been one of the worst-performing stocks from the auto and auto ancillary space.
After shedding more than 20 percent in the last seven months, the fall seems to have halted around its cluster of supports on higher degree timeframe charts.
On the weekly chart, we can see the completion of 50 percent retracement of the entire rally from March 2020 lows to January 2021 highs.
In addition, we can see the formation of a bullish hammer pattern. This pattern has already been activated and hence, we reiterate buying for a short-term price target of Rs 776.
(The author is Chief Technical & Derivatives Analyst at Angel Broking)
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