The Nifty50 ended a tad above 17,400 with a weekly loss of a percent. The sell-off was triggered as the Nifty failed to cross a key technical level of 17,800, which is the 61.8 percent retracement of the recent down move. However, considering the recent positive development and head start to the week, we were of the view that Nifty would surpass the hurdle to reclaim 18,000. Now, with two back-to-back weak sessions, the momentum is again in favour of the bears.
Despite this, we remain a bit hopeful and expect important levels to remain unbroken in the current week; especially after seeing prices showing resilience around the 200-SMA (simple moving average - 17,434) and forming a key technical pattern known as ‘Bullish Hammer’. It would however be very early to jump to any conclusion and considering the recent volatility, traders should ideally wait for the trend to establish.
In such a scenario, Friday's low of around 17,320 would be seen as immediate support followed by sacrosanct support at February's swing low of 17,250. On the flip side, the bearish gap left around 17,570 – 17,600 should be considered an immediate hurdle.
In our sense, instead of swaying on both sides of the trend, traders should ideally prefer staying light on positions and keep accumulating quality propositions in a staggered manner.
Here are two buy calls for short term:
Cipla: Buy | LTP: Rs 881 | Stop-Loss: Rs 869 | Target: Rs 925 | Return: 5 percent
This pharmaceutical giant has been on a continuous declining mode ever since it registered its all-time high of Rs 1,185.25 in the beginning of November 2022. There has been no real attempt shown to recover from this counter in last five odd months.
With recent correction, stock prices have reached its multi-month cluster of supports around Rs 870. In the first half of calendar year 2021, prices broke out from Rs 870 and since then all attempts around this level have successfully been bought into.
Now once again stock has reached this cluster with lot of headwinds for this company as well as the entire space. Hence, it would be daunting task for bulls to repeat the symmetry this time.
We advise traders to buy this stock only after surpassing Rs 890 mark. In this case, a good relief towards the trading target of Rs 925 cannot be ruled out. The stop-loss can be placed at Rs 869.
Cummins India: Buy | LTP: Rs 1,681 | Stop-Loss: Rs 1,620 | Target: Rs 1,800 | Return: 7 percent
The entire capital goods space has been bucking the trend in recent challenging times and this stock specifically is completely on a roll. We can see a series of ‘Higher Highs Higher Lows’ cycle in this counter which began last year around the month of July.
Since then, it never looked back and maintained its strong positive posture. In the week gone by, the stock prices resumed its upwards trajectory after a brief pause of nearly two weeks.
The volumes have been steady in rallies, which is an indication of good broad-based participation. Traders are advised to buy for a near term target of Rs 1,800. The stop-loss can be placed at Rs 1,620.
Disclaimer: The views and investment tips expressed by investment 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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