Indian market started the past week on a sluggish note on June 5 as indicated by the SGX Nifty. As the day progressed, the global cues improved a lot but our market failed to move in tandem. In the initial hour, Nifty revisited previous Thursday's low around 16,450 and then throughout the remaining part of the day, stayed in a slender range with a modest recovery in the latter half.
Eventually, the Nifty ended the session with a marginal loss, tad above the 16,550-mark. This was followed by back-to-back gap down openings, where on last Thursday, our market managed to recover smartly to reclaim 16,400 with some authority. However, one more round of selling in the US market poured complete water on this attempt and as a result, Friday's session concluded on a negative note around the 16,200 mark.
There has been no relief in US bourses and any small rebound is getting sold into, which is having a rub-off effect in all markets across the globe. Although, we remained above key supports for the major part of the week, Friday's session displayed lot of weakness.
We have been continuously alluding to key support of 16,300 – 16,260 on a closing basis. These levels are finally broken which has negated the minor upward trend that emerged last week after surpassing the 16,400 mark. Market is unable to show any kind of strength at higher levels; but despite this we are still not getting convinced with the weakness. We would rather reassess the situation in the first half of the forthcoming week and all eyes on crucial levels like 16,000 on the lower side and 16,400 on the upside.
The pragmatic strategy would be to stay light on positions and stock specific also, we are seeing lot of whipsaws on either side. In fact, it has become a nightmare in trading stocks in last couple of weeks.
Let’s see how things pan out going ahead and we are still hopeful of some recovery in coming days. If this has to happen, US markets need to provide that much needed relief.
Here are two buy calls for next 2-3 weeks:
BPCL: Buy | LTP: Rs 331 | Stop-Loss: Rs 318 | Target: Rs 350 | Return: 6 percent
The oil marketing companies (OMCs) have undergone tough times in last few months. Although the macro trend remains bearish, this week we observed some stability in stock prices, especially on last Thursday, the entire space just took off. This is an early indication of some near-term bounce in the counter.
At this juncture, we like Bharat Petroleum Corporation (BPCL) from this basket. As far as technical observations are concerned, we can see stock prices challenging the '20-day EMA' (exponential moving average) for the first time in recent months.
In addition, the 'RSI-Smoothened' oscillator has turned upwards from an oversold territory, which may provide some impetus to the move.
Hence, we recommend buying this stock for a trading target of Rs 350. The stop-loss can be placed at Rs.318.
Thyrocare Technologies: Buy | LTP: Rs 717.40 | Stop-Loss: Rs 698 | Target: Rs 750 | Return: 4.5 percent
Post the Covid dream run, all these pathology related companies went through a lot of stressful periods in last 10 odd months. Recently, the selling seems to have arrested as stock prices found support around Rs 650 and made couple of attempts to rebound sharply from this zone.
On last Friday, stock prices finally managed to traverse the key short-term moving average '20-EMA' for the first time in last 2 months.
In addition, more than average volumes are clearly visible to support the price action. Thus, we recommend buying for a near term target of Rs 750. The strict stop-loss needs to be placed at Rs 698.
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