Nifty witnessed a sharp up move from the support levels of 8,950 with broad-based momentum across sectors and stocks.
Large private sector banks and auto stocks led the up move and the breach of 9,250 gave a strong breakout in high beta sectors like realty, metals and midcaps.
Nifty50 has gained by 5 percent while midcaps and small caps gained by 3 percent each for the week.
Among individual sectors, private banks, metals and auto indices have gained by 11.5 percent, 7.8 percent and 5.9 percent, respectively, while energy, FMCG and IT underperformed the broader markets to gain in the range of 1-3 percent for the week till date.
We remain positive on markets with higher targets of 9,750-9,800 levels filling the gap levels it had left at the start of the May series.
On the downside now, strong supports would be in the range of 9,050 levels near the 50-day average and any decline near 9,250 would be a good opportunity to add longs.
One should note that mid-caps and small-caps have underperformed during the current rally and they may witness a good amount of action over the next few weeks.
Nifty PSU Bank index continues to underperform and a close above 1,180-1,210 levels would give a strong breakout for the sector to outperform the other sectoral indices.
Here are three trading ideas for the next 3-4 weeks:
The stock has closed in a hammer candle on the monthly expiry chart and we expect a strong reversal breakout on the higher side.
It has closed at a 4-week high with strong volumes and RSI trading above the average line for the last couple of weeks.
The stock is trending in a narrow range near its short and medium-term averages and we expect an upward breakout from the current levels.
It has made a higher bottom on the weekly charts and RSI cutting upwards from the lower end confirms our positive outlook.
The stock has taken support near its 34-quarter average at Rs 485, witnessing positive momentum from the lower range.
The key technical indicators RSI is trading above its average line which has also reversed turning upwards, poised for a breakout from current levels.
(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.