With the weekly closure, the Nifty snapped its four weeks of winning streak and settled a tad above the 18,300 level on November 18. It had been a lacklustre week for the market participants as the follow-up buying was clearly missing to uplift the market, and this resulted in a lull movement in the benchmark index.
Global concerns over rising inflation have led to mixed action, mirroring which the market remained tentative at the higher levels.
On the technical front, the structure remains upbeat. As far as levels are concerned, the bullish gap of 18,100-18,250 is likely to provide a cushion to any intra-week blip, and it is highly anticipated that the dip would augur well for the bulls.
On the flip side, 18,450-18,500 is a significant hurdle for the bulls, and any decisive breach above the same could only trigger a fresh round of rally in the market. Meanwhile, the market awaits some trigger points to have an upsurge, and in the meantime, the index is expected to remain in the mentioned range.
We remain sanguine with the uptrend and would advocate the traders to utilize the dips to add long position in the index. Also, despite the lethargic moves in the index throughout last week, some of the individual pockets kept buzzing.
Hence, we expect some interesting moves to unfold in a larger pool of stocks, which is likely to provide better opportunities for momentum traders.
We advise traders to stay with a similar buy on decline strategy till the time important supports are held comfortably.
Here are two buy calls for short term:
Sterlite Technologies: Buy | LTP: Rs 177.70 | Stop-Loss: Rs 168.40 | Target: Rs 195 | Return: 10 percent
It has been hovering in a symmetrical triangle pattern on the daily chart and has seen some traction in terms of volume from the past couple of trading sessions. In the last session, the stock witnessed a volume-based break out of the pattern and is looking sturdy to continue its upward march in the near period.
Also, the stock has managed to traverse the key moving average of ‘200-day SMA’ (simple moving average) with some conviction after a long time, which construes a strong technical development.
Even the major technical indicators are in line with the uptrend, adding a bullish quotient to the counter. Thus, we recommend buying for a near term target of Rs 195. Traders can participate by following strict stop-loss at Rs 168.40.
Biocon: Buy | LTP: Rs 287.35 | Stop-Loss: Rs 280 | Target: Rs 299 | Return: 4 percent
This stock has been one of the worst performing stocks in last two years. The stock prices have been on a gradual decline mode all this while and have corrected more than 40 percent from its record highs. In last 3-4 weeks, the price correction seems to have arrested and we are seeing some early signs of revival in this stock.
On a daily time frame chart, the stock has managed to close above Rs 287 which is a sign of strength. If we combine this with weekly chart, we can observe the ‘RSI-Smoothened’ oscillator confirming a positive crossover from oversold territory.
Traders are advised to buy for a near term target of Rs 299. The strict stop-loss needs to be placed at Rs 280.
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