In the last few weeks, every Monday has brought some unexpected moves at the opening, and in the week gone by, too, it surprised everyone with a decent gap-down opening.
A lot of domestic factors weighed heavily on the market to trigger the downside gap and global cues had very little to contribute in it.
Fortunately, the Nifty managed to hold the key support in the initial hiccup and in fact, a good amount of buying at lower levels led to a complete recovery in the latter half.
Barring Tuesday’s sluggishness, we witnessed a slow and steady up move throughout the remaining part of the week to reclaim the 14,800-mark.
On a weekly basis, the Nifty managed to clock over a percent gains in the inaugurated week of May month.
Since the last few days, the index seems to have lost its charm. Although it has been maintaining its positive posture throughout, the overall movement is quite lethargic.
All the key indices like Nifty, Bank Nifty, and Nifty IT are trapped in a slender range. As far as higher levels are concerned for Nifty, 14,900 – 14,960 – 15,050 are the levels to watch out for, whereas on the flip side, 14,750 – 14,600 – 14,450 are to be considered as immediate supports.
Till the time we do not see the index coming out of its congestion zone, such boredom is likely to continue. Thus, it is better not to trade aggressively in the index, and carrying of overnight positions is strictly avoided.
Taking a glance at the intraday charts, we can see the range shrinking drastically, and hence, there is a high possibility that we may see a decisive breakout soon.
Although key indices are displaying complete boredom, the broader market is clearly not short of actions. In fact, there were numerous themes that played out exceedingly well throughout the week.
Every now and then we are observing some sector chipping in to keep the traders’ fraternity engrossed all the time.
Hence, the pragmatic approach would be to keep focusing on such potential movers to obtain better trading opportunities. One of the notable observations is the development in the ‘Nifty Midcap’ index.
In the latter half of the week, it has managed to surpass the higher boundary of the cluster of resistance by a small margin. A couple of follow-up moves in this basket would provide the real impetus for the next leg of the rally.
Here is a list of stocks for the next 3-4 weeks:
LIC Housing Finance: Buy| LTP: Rs 422| Target: Rs 440| Stop Loss: Rs 412| Upside 4%
Overall, this stock has been quiet for a long time and in fact, we did not see its participation in the humongous rally that was seen in some of the financial counters lately.
However, the short-term trend has been strongly up for this counter. After a brief pause, we witnessed a decisive breakout from the ‘Bullish Flag’ pattern on May 7.
The volumes were decent and the momentum oscillators were also positively poised. Considering all this, we recommend going long for a target of Rs.440 in the coming days. The strict stop loss can be placed at Rs.412.
Glenmark Pharma: Buy| LTP: Rs 591| Target: Rs 645| Stop Loss: Rs 564| Upside 9%
The pharma space once again started buzzing in the week gone by due to the havoc created by second wave of COVID-19. The move was mainly led by Lupin and then others joined the party. Glenmark was consolidating in a range since last few days.
However, with Friday’s up move, the stock price confirmed a ‘Bullish Flag’ pattern on the daily chart. The price move is accompanied by sizable volumes, indicating a strong buying interest in the counter.
Traders are advised to go long for a target of Rs.645 in the coming days. The strict stop loss can be placed at Rs 564.
Disclaimer: The views and investment tips expressed by the investment experts on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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