The ongoing rally across the globe is extraordinary. Although we have not been actively participating in index-specific trades since last week, the focus remained on individual stocks.
We are advocating booking timely profits on trades and we would continue to do so. After a certain time, it’s always better to let go of some move and focus on money management.
As far as levels are concerned, 11,700-11,750 remains an immediate hurdle which coincides with a multi-month upward sloping trendline.
On the other hand, 11,600 followed by 11,540 would be seen as key support levels.
Since we have approached yet another cluster of resistance, we continue to advise some caution at higher levels.
It is better to take one step at a time and keep a close eye on key levels. It is also important to take note that the short-term pause would be seen below 11,540-11,500.
For the last few days, the banking space has been outperforming and last week although there was a gradual move in Nifty, the banking index took a giant leap of 10 percent.
Apart from this, there was a decent stock-specific action seen throughout the week, but we could see some sectoral shift during the latter half.
One needs to be selective when it comes to stock picking going forward.
Here are two buy and one sell calls for the next week:
Canara Bank | Buy | LTP: Rs 114.75 | Target price: Rs 122 | Stop loss: Rs 107.80 | Upside: 6%
Till last week, the banking index was underperforming significantly. In the index, public sector banks (PSBs) have been laggards for the past few years.
However, the entire banking space seems to have revived, witnessing a catch-up move to the broader market.
With Bank Nifty surging 10 percent last week, PSBs managed to finally contribute to the rally on Friday.
Canara Bank is considered to be the favourite of traders. It has confirmed a good price-volume breakout on the daily chart.
Hence, we recommend going long on a decline towards Rs 112-110 for a target of Rs 122 over the next few days.
Info Edge India | Buy | LTP: Rs 3,389 | Target price: Rs 3,590 | Stop loss: Rs 3,280 | Upside: 6%
During the last five months, a lot of different themes played out well and in this course of action, many stocks have given multifold returns.
This stock belongs to that camp as it steadily kept moving higher since March lows and has already doubled since then.
Recently, we witnessed some consolidation in this counter, which can be construed as a time-wise correction.
Last Friday, the stock managed to breakout from recent congestion along with decent volumes. Hence, we expect the stock to resume its uptrend now.
JSW Steel | Sell | LTP: Rs 281 | Target price: Rs 270 | Stop loss: Rs 291 | Downside: 4%
After a long period of underperformance, the metal space took a U-turn and has managed to give a stupendous move in the last three months.
Some of the steel counters just rallied as if there is no tomorrow, without giving even a small decline.
This is the nature of metal counters and historically it is proven when they rally, they just keep giving gravity-defying moves and vice versa.
Although it’s difficult to expect weakness in such high beta counters when they are in a strong uptrend, we sense some profit-booking taking place in the coming week.
JSW Steel showed early signs of profit-taking last Friday after witnessing some selling to close around day’s low.
We recommend going short around Rs 283-285 for a downside target of Rs 270.
(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.