In the week gone by, the Adani group fiasco hit the market like an asteroid. The spillover of the carnage triggered a massive selloff in the banking space that soon spread to the broader market. Fortunately, things cooled off towards the end of the week, with the Nifty recovering smartly to reclaim the 17,800 mark on a closing basis.
Though the index we managed to recover the lost ground, we are still not out of the woods completely. A continuous news flow about the Adani group is likely to lead to volatile swings on both sides.
For the Nifty, the immediate support is at 17,600 but 17,400–17,300 remains the sacrosanct level, coinciding with the 200-day SMA (17,297). As long as the Nifty defends the level, there is no reason to worry.
For a consistent up move, the Nifty needs to surpass 18,000– 18,100 on a closing basis, which would confirm the completion of the recent corrective phase.
Traders are advised to keep a tab on the above-mentioned scenarios as well as global and domestic events.
Here are two buy calls for the short term:
Mahindra & Mahindra: Buy | LTP: Rs 1,388 | Stop-Loss: Rs 1,348 | Target: Rs 1,460 | Return: 5 percent
The automobile space has bucked the trend in the past couple of weeks. This stock didn't participate in the broader market destruction and when things calmed down, it started moving in the upward direction.
Stock prices clocked fresh record highs and confirmed a weekly close around them, indicating strength in the counter.
On the weekly time-frame chart, we can see a positive crossover in ‘RSI-Smoothened’ oscillator. We recommend buying this stock for a trading target of Rs 1,460. The stop-loss can be placed at Rs 1,348.
Ashok Leyland: Buy | LTP: Rs 153.90 | Stop-Loss: Rs 149 | Target: Rs 162 | Return: 5 percent
We will stick to the outperforming pocket and this stock has been resilient in recent weeks. The price has stayed 200-day SMA (Rs 145) for the last three months and developed a good accumulation price pattern.
On February 3, we witnessed a breakout above recent hurdles on the closing basis and considering the decent volume activity, we expect the stock to continue its northward trajectory.
Traders can look to buy for a near-term target of Rs 162. The stop-loss can be placed at Rs 149.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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