A weakness in global markets and a rush to book profit in domestic investors drove the Nifty50 index down with a deep cut of 2.57 percent last week to a tad below the 19,700 zone.
From a technical point of view, the Nifty index has seen an intense correction after three straight weeks of rally and settled below the 50 percent Fibonacci retracement. The recent price action certainly portrays the ferocity of the bears, which not only decisively dragged the index below the psychological mark but yielded a dent in the ongoing undertone.
As far as levels are concerned, the 19,600-19,500 zone is likely to cushion the blips. While on the higher end, 19,780-19,800 is likely to be seen as intermediate resistance, followed by a series of resilience from 19,850-19,900 and finally the 20,000 mark in the near-term period.
Positive global developments could only put a halt to the ongoing carnage and it would be very engaging to watch how things pan out in the upcoming week. For now, one needs to stay very selective with stock preferences and avoid being aggressive in the markets.
Here are three buy calls for short term:
Bank of Baroda: Buy | LTP: Rs 215.35 | Stop-Loss: Rs 202 | Target: Rs 236 | Return: 9.6 percent
Bank of Baroda has seen strong buying traction in the last couple of trading sessions and clocked new highs on the price chart. The recent developments have been backed by good volumes, which led the counter to comfortably hover above all its major EMAs (exponential moving averages) in all time frames.
Also, the primary technical indicators align with the price movement, suggesting continuation in the northward journey for the counter in the comparable period. Hence, we recommend buying Bank of Baroda around Rs 210-215, with a stop-loss of Rs 202 and for a target of Rs 236.
Granules India: Buy | LTP: Rs 336.80 | Stop-Loss: Rs 320 | Target: Rs 360 | Return: 7 percent
Granules India has seen a V-shaped recovery in the recent period and has firmly been able to withhold the higher grounds. Also, the stock has witnessed a buoyant upmove on the back of robust volumes, signifying inherent strength.
At present, the stock is firmly placed above all its EMAs and has also surpassed the crucial resistance of Rs 325-320 in a decisive manner. The rebound was backed by a notable increase in average traded volumes, supporting the bullish bias in the counter.
Technically, the stock looks sound and likely to carry upward momentum. Hence, we recommend buying Granules around Rs 332-335, with a stop-loss of Rs 320 and a target of Rs 360.
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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