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Hot Stocks | Here's why you should bet on Time Technoplast, HDFC for healthy returns in short term

Hot Stocks | First couple of sessions would be important for market as it will set the tone ahead of the mega event. One should focus on Financial and Auto space because in case of a recovery, they are the ones to be the frontrunners

January 24, 2022 / 07:25 AM IST

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Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One

The market had kicked off the last trading week on a positive note last Monday and it was followed by yet another head-start to test the 18,350 mark.

Traders, however, turned nervous and it led to a decent profit-booking below 18,100 on the same day. After this the global markets became jittery the market experienced sustained selling.

As the week progressed, the Nifty went on to thrash all intermediate supports to eventually test sub-17,500 levels in the last session of the week on Friday. A few banking heavyweights, however, provided the much-needed support to pull the Nifty beyond 17,600 at the close.

Close

The selloff spree slammed the brakes on the Nifty's four-week winning streak and placed the index at a very interesting juncture for the week ahead.

Although we saw 18,350 as a mild hurdle, we did not expect the Nifty to come off it at such velocity. In fact, after breaching 18,100, we did anticipate further decline towards 17,800. But whatever happened in the last couple of sessions to even test 17,500, has surprised unpleasantly to some extent.

Now with reference to our intra-week commentary, we have been mentioning how 17,650 is important in a short term and the real damage of the recent upward trend would start below it. Today, we did slip below it but the way the market recovered in the last one hour, we need to revise our levels a bit. We generally do not do this, but it should be taken as an exception.

Taking a glance at the daily time frame chart, we can see the Nifty retracing almost by 50 percent of the recent rally and saw some respite after nearing the '89-day EMA' (exponential moving average). Hence, for the coming week, 17,500 – 17,400 should be considered as crucial supports. Although the global picture is not good, we still would like to back our inclination towards some relief move. If any recovery has to happen there would not be better levels than this.

On the upside, first sign of strength would start above 17,800 and then we can reclaim the 18,000 terrain ahead of the budget itself. First couple of sessions would be important for market as it will set the tone ahead of the mega event. One should focus on Financial and Auto space because in case of a recovery, they are the ones to be the frontrunners.

Here are two buy calls for next 2-3 weeks:

HDFC: Buy | LTP: Rs 2,592.95 | Stop-Loss: Rs 2,538 | Target: Rs 2,690 | Return: 3.74 percent

This marquee NBFC stock has undergone a stressful time of late. In this process, the stock prices fell around 17 percent from record highs with the help of lower highs lower lows.

If we take a glance at the daily time frame chart, we can see stock prices trading at its make or break lows. Technically speaking, if we connect two important lows, the trend line coincides around Friday's low. So if any recovery has to happen, it is likely to come from this position only.

Hence, we advise traders taking this contradictory punt because the risk is minimal and if everything goes as per the expectations, the reward would definitely be higher.

One can look to buy for a trading target of Rs 2,690. The stop loss can be placed at Rs 2,538.

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Time Technoplast: Buy | LTP: Rs 86.20 | Stop-Loss: Rs 77.90 | Target: Rs 102 | Return: 18.3 percent

Although the entire market corrected sharply this week, there were handful of stocks that did extremely well and this stock is clearly one of them.

On Friday, despite the stock prices falling sharply on the back of profit-booking, the weekly structure still looks quite sturdy. We can see it traversing weekly '200-SMA' with some authority along with sizable volumes, indicating tremendous strength in the counter.

The momentum oscillators on daily charts are pointing northwards, which indicates momentum to continue in the upward direction. We recommend buying for a medium term target of Rs 102. The stop loss can be placed at Rs 77.90.

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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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Sameet Chavan is the Chief Analyst-Technical and Derivatives at Angel One Ltd.
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