Moneycontrol PRO

Hot Stocks | Shriram Transport Finance, MGL two trading ideas for short term

As far as supports are concerned, 9,900 continues to be seen as a key support on a closing basis while 9,544 - 9,900 will be a support zone for the coming week.

June 15, 2020 / 07:23 AM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Sameet Chavan

Last week, we started proceedings with a good bump up on Monday, owing to favourable global cues.

However, this ecstasy was short-lived as we witnessed gradual profit-booking thereafter. Until Thursday’s first half, the index kept gyrating in a very slender range but post the deferment of Supreme Court’s verdict with respect to AGR dues, markets joined hands with global peers and Nifty breached the support of 10,000.

Things worsened when the US markets plunged more than 5 percent on Thursday.

This resulted in a massive gap down opening in our markets on Friday. Fortunately, the markets saw a V-shaped recovery, concluding the day in the green and thereby restricting weekly losses to a couple of percents.

Close

Barring the last two sessions, the Indian market was undergoing a consolidation phase, but the range widened a bit towards the fag end.

Broadly speaking, in the midst of all this, it retraced recent upmove and managed to reclaim the crucial support of 9,900 in a matter of a few trading hours.

The trend changing level was 9,900 and although it was breached intraday, we will give more weightage to closing levels.

Nifty has not only reclaimed it on a daily basis but with Friday’s close, it has defended the levels on a weekly basis as well.

Hence, we continue to remain upbeat and construe this decline as a retracement of the recent up move, which was very much needed to provide the strength for the next leg of the rally.

As far as supports are concerned, 9,900 continues to be seen as a key support on a closing basis while 9,544 - 9,900 will be a support zone for the coming week.

On the flip side, we expect Nifty to again go back to recent highs of 10,150 – 10,300 or may even head towards 10,600 – 10,800 levels.

One of the key rationales behind this hypothesis is the overall positioning of the Bank Nifty. A couple of weeks back, we could see confirmation of a positive crossover in ‘RSI-Smoothened’ on the weekly chart.

Historically it is proven that when this kind of crossover happens in this oscillator, it has the tendency to give bigger moves and hence, this observation is adding conviction to our optimistic stance.

Also, it would be unfair not to throw some light on the midcap index, which gave a remarkable move on Friday and thereby indicates a strong move in the offing.

Here are two buy recommendations for the short-term.

Shriram Transport Finance Company | Buy | LTP: Rs 687 | Target price: Rs 734 – 752 | Stop loss: Rs 658 | Upside: 9%

This has been clearly one of the laggards over the last few months. It has not participated at all in the overall recovery the markets saw from the March lows.

But from the last couple of days, most of the underperforming NBFC and mid-cap private banking names have started to show some life.

Last Thursday, despite weak quarterly numbers, stock prices stood firm and on Friday, we saw a massive surge when markets started recovering from lower levels.

It has already confirmed a breakout on daily charts and the way it is positioned, we can see good moves in this high beta name.

Importantly, the volume activity has improved drastically in the last couple of days, providing credence to the move.

Mahanagar Gas (MGL) | Buy | LTP: Rs 1,080.45 | Target price: Rs 1,124-1,150 | Stop loss: Rs 1,018 | Upside: 6%

Recently, all gas distribution companies have been in the limelight and this, being the F&O component, continues to remain our preferred stock from this space.

Last week, the stock prices confirmed a price-volume breakout from the cluster of hurdles. This was followed by consolidation for a few days. And now after its quarterly numbers, the stock seems to have picked up its momentum again.

The daily, as well as, the weekly chart looks extremely promising and hence, we expect a continuation of the ongoing momentum in the stock.

(The author is Chief Technical & Derivatives Analyst at 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.
Moneycontrol Contributor
first published: Jun 15, 2020 07:23 am

stay updated

Get Daily News on your Browser
Sections
ISO 27001 - BSI Assurance Mark