Sameet Chavan of Angel Broking continues to remain sanguine on the market and expects Nifty to reach a new milestone very soon
Trading for the week kick-started with an upside gap owing to positive cues from global peers. However, during the remaining part of the week, we saw the index struggling at higher levels.
The index got stuck in a small 150-180 points band with gyration on both sides. Due to the tail end correction on November 8, the Nifty pared-down a major chunk of its weekly gains to conclude on a flat note.
The benchmark index, Sensex, clocked fresh highs last week and the Nifty is somehow lagging behind a bit. Last week, we saw the Nifty make several attempts to go beyond its previous high of 12,103.05.
It appears that traders are a bit cautious whenever the Nifty surpasses the 12,000 mark during the day. Looking at November 8’s close, we need to see how the index behaves around 11,843 levels.
If the index sustains below this key intraday support, we may see this profit booking getting extended towards 11,784–11,714 levels.
In case of these possible scenarios, we will not consider this as a trend reversal, rather we construe this as a decent profit booking, which is essential for every robust rally.
We continue to remain sanguine on the market and expect the Nifty to reach a new milestone very soon. Although the index did not do much last week, there were some sectoral themes that played out well and marquee names within these sectors that did well for themselves.
The metal and realty space was clearly among them. In the initial part of the week, few auto-ancillary names were on a roll. Similarly, we expect such stock specific moves to continue in the forthcoming week.
Here is a list of top two stocks that could return 10-12 percent in the next three-to-four weeks:
Tata Steel: Buy| LTP: Rs 397| Target: Rs 425-440| Stop Loss: Rs 374| Upside 10%
The entire metal space has undergone severe pain over the last many months; courtesy to unfavorable developments on the global front (especially in China).
But it now seems that most of the uncertainty is over, and global tensions are subsiding one after the other and that’s clearly getting reflected in the recent price action of these China-sensitive names.
‘Tata Steel’ has been consolidating late around its multi-year supports and last Tuesday, we saw first sign of revival. The stock prices confirmed a breakout above recent swing high which was followed by some mild profit booking.
However, last Friday, strong buying re-emerged at the breakout point which resulted into a spectacular single day gains of nearly 5 percent.
With this, the stock has resumed its northward trajectory and looking at the volume activity, we expect it to extend further in the coming days.
Thus, we recommend buying this stock at the current levels for a target of Rs.425-440 over the next 14 sessions, and a stop loss should be fixed at Rs 374.
Alembic Pharma: Buy| LTP: Rs 577| Target: Rs 648| Stop Loss: Rs 527| Upside 12%
After a long underperformance, similar to some other beaten-down sectors, the Pharma space is also now on the path of some revival. On the daily chart, stock prices have broken above its stiff resistance of 560 which previously acted as a supply zone seven times in the last eight months.
The breakout from the same has resulted in a bullish reversal pattern breakout known as ‘Inverse Head and Shoulder’. The said breakout is supported with a good increase in volume and now after a period of consolidation, the price structure indicates a trending up move in the near term.
During the week, we did not see any follow up move, rather prices consolidated in a range. But we believe this is just a pause before the next leg unfolds.
Hence, we recommend buying this stock at current levels for a target of Rs.648 over the next few weeks, and a stop loss should be fixed at Rs.527.
(The author is Chief Analyst- Technical & Derivatives, Angel Broking)Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.