Although we didn't mirror the weakness, the markets remained tentative to conclude the week ended January 20 a tad above the 18,000 mark. In the early part of week, the benchmark index managed to cross the intermediate hurdle of 18,100; but didn't have enough legs to go beyond the sturdy wall of 18,200 - 18,300. It seems market requires some solid trigger to break the shackles.
On the global front, hopefully, we see relief in the US markets after three days of continuous weakness. However, at our end, few heavyweights are going to report their earnings over this weekend, which will have a considerable impact on our market as we step into the monthly expiry week. As of now, we continue to remain hopeful and expect the action to trigger in the upward direction.
As far as levels are concerned, the rock-solid support is visible at 17,900 – 17,750 and till now, bulls have managed to defend it in a challenging environment. On the flipside, it has become a daunting task to surpass the hurdle of 18,150 – 18,300.
The way our markets have undergone a long time-wise correction; we expect the breakout to happen soon from this contracted range. Hopefully, quarterly earnings from Reliance Industries and banking giant ICICI Bank, set the tone and help us come out of this slumber phase.
The coming week is likely to see some action although it’s truncated as the expiry is preponed by a day on account of Republic Day holiday on Thursday. Also, it’s important to understand, we are inching closer to the ‘Union Budget’ and hence, market would try to position itself ahead of this mega event.
Here are two buy calls for short term:
GAIL India: Buy | LTP: Rs 99 | Stop-Loss: Rs 94.5 | Target: Rs 107 | Return: 8 percent
In the last couple of months, the stock prices have shown a steady up move by continuously moving in a ‘Higher Top Higher Bottom’ price formation. Recently the stock prices were facing stiff resistance around Rs 97 – 98 levels zone, however this hurdle has been crossed indicating renewed buying interest in this counter.
The price structure of the recent price formation resembles a ‘Cup and Handle’ pattern that is technically considered a strong bullish pattern. In addition, we are witnessing a bullish crossover of 50 SMA (simple moving average) crossing 200 SMA from below along with the robust volumes on the daily chart.
One can look to buy for a trading target of Rs 107. The stop-loss can be placed at Rs 94.50.
Dabur India: Buy | LTP: Rs 566 | Stop-Loss: Rs 549 | Target: Rs 598 | Return: 6 percent
This FMCG company has done nothing during the entire calendar year 2022. It kept oscillating within a broad range with prices rebounding from support zone and vice versa. Recently, we witnessed a price correction from the higher end of Rs 610, which got arrested around its multiple support zone of Rs 540.
This week, the stock managed to give steady recovery from the lower band and on Friday, we witnessed a sudden spurt to confirm its daily close above all key moving averages.
Taking a glance at the rising volumes, we expect the momentum to extend in the forthcoming week. We recommend buying for a short term target of Rs 598. The stop-loss can be placed at Rs 549.
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