During the last week of March, our market somehow managed to stabilise and then saw some decent recovery thereafter.
Until April 28, Nifty had been struggling to surpass 9,400 mark, but due to strong buying momentum in the last couple of sessions, Nifty finally broke out and went on to close convincingly above 9,800-mark.
March was one of the worst months for our market, but fortunately, this was followed by a stupendous April during which, we managed to recoup 50 percent of the damage done in March.
It was a broad-based rally and some of the laggards like financials and auto contributed heavily, which provided credence to the move.
Looking at the overall setup, Nifty is very much poised for an extended move towards 10,200-10,400, which would be seen as a strong hurdle for the market.
Traders should start lighting up positions in this zone and then wait for further signals.
There is an important development happening on the global front over the last couple of days, which cannot be overlooked.
US President Donald Trump has threatened China to impose new tariffs which could lead to the resumption of a trade war. Market participants across the globe look intimidated, resulting in a sharp decline across the globe.
SGX Nifty, too, reacted negatively to this development and is showing a massive cut. On May 4, we need to see how our market reacts to it and if they open in line with SGX Nifty, 9,300 and 9,100 would be seen as
If the market fails to hold that level, it will apply brakes on the recent optimism and in this case, we will have to revisit our view.
However, if our market doesn’t react to the tune of SGX Nifty and shows some buying interest at lower levels, the above-mentioned bull case scenario remains valid.
So, all eyes would be on global development which would dictate the immediate path of action for our market.
Here are two stock recommendations for the next 3-4 weeks:
ONGC | Buy | LTP: Rs 79.75 | Target price: Rs 92 | Stop loss: Rs 68 | Upside: 15%
This one of the ‘Maharatna’ companies of India has been underperforming for several years now. In fact, in the recent meltdown, the stock prices plunged to the year 2004 lows.
Fortunately, after marking a low around Rs 46, we witnessed a decent recovery in this stock and in the process, it has managed to confirm a breakout from the ‘Symmetrical Triangle’ pattern.
Importantly, the recent rally in the stock prices is backed by considerably higher volumes.
So, we recommend going long on a decline towards Rs 75 for a positional target of Rs 92 in the coming
Bharti Airtel | Buy | LTP: Rs 514.55 | Target price: Rs 560 | Stop loss: Rs 491 | Upside: 9%
This stock has been consolidating above the 50 and 89-EMA for the last few sessions and has now broken above this consolidation on the upside, confirming a continuation pattern known as ‘Pennant’.
The said breakout is supported by a good increase in volume. In addition, prices have now closed above the higher end of Bollinger Band which indicates strong momentum upmove after the recent consolidation.
In addition, the momentum oscillator RSI is pointing northward after the recent dip, supporting the buy call.
Looking at all the above evidence, we sense a strong upside in the counter.
(The author is Chief Technical & Derivatives Analyst at Angel Broking)Disclaimer:
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