Sameet Chavan
The market snapped its six-week winning streak due to some weakness around 11,300. However, the damage is not big and it should be interpreted as profit-booking after a relentless rally.
Towards the end of last week, we were seeing 11,050 as key support but the way markets behaved on Friday around it, this does not appear to be an important support.
Hence, we would rather extend the range slightly on the downside and would observe key supports around 10,950-10,870 for the forthcoming week.
If profit-booking extends towards these mentioned levels, it should still be considered as a corrective move and not the actual trend reversal.
The actual weakness would start only if Nifty sustains below 10,870, till then, one should continue with a stock-specific positive bias.
On the flip side, 11,300-11,350 has also become a strong ceiling and the fresh leg of the rally would only unfold above this.
Till then, traders are advised to remain light within a slightly bigger range of 10,870–11,350.
For the early part of the week, 11,200-11,250 should be considered as an immediate resistance zone.
The banking space has been the weakest link and the way it is placed, the directional move in benchmark would mainly be triggered by the banking stocks only.
Hence, all eyes will be on it. Apart from this, the entire pharma space has been once again on a roll after a brief pause. There were some other sectoral movers also that kept buzzing and bucking the trend.
So, the pragmatic approach would be to focus on individual stocks until the time market remains in the above-mentioned range.
Here are two buy calls for the next 1-2 weeks:
Natco Pharma | Buy | LTP: Rs 788 | Target price: Rs 850 | Stop loss: 743 | Upside: 8%
This has been our preferred stock within the pharma space for the last one-and-a-half months.
The way this stock has performed in the last couple of trading sessions, it is well poised for a bigger move.
As almost every stock in this space is flying one after another, it’s time for this stock now to show its mettle.
The daily, weekly and monthly timeframe charts look extremely promising and the way volume activity has picked up, the stock is likely to have some catch-up move to its larger peers.
Godrej Properties | Buy | LTP: Rs 934 | Target price: Rs 965 | Stop loss: Rs 898 | Upside: 3%
After witnessing a spectacular rally in June, this stock did nothing during the entire July. It slipped into a consolidation mode and kept hovering around the 200-day SMA.
Last Friday, the stock gave a tremendous move after coming out of the long slumber.
This price activity was accompanied by sizable volumes, providing credence to the move.
The way charts are shaped up now, we expect this stock to perform well over the next few days.
(The author is Chief Technical & Derivatives Analyst at Angel Broking)
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