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Hot Stocks | Tata Metaliks, Sutlej Textiles can give up to 10% return in short term

"Traders are advised to remain light and stick to a stock-centric approach by following strict stop losses," said Sameet Chavan, Chief Technical & Derivatives Analyst at Angel Broking.

July 12, 2021 / 07:36 AM IST
 
 
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On the weekly expiry day of the last week, the market had a rough day which was mainly due to negative development across the globe. Fortunately, the fall got arrested and Nifty eventually concluded the week tad below 15,700.

In the last month or so, we have seen multiple attempts to reach the millstone of 16,000.

The way we closed last Wednesday, we were all set to see the magical figure, but global sell-off was the spoilsport. There was no follow-through to this selling momentum as we saw Nifty stabilizing after entering the key support zone of 15,650 – 15,600.

When the market fails to surpass a specific level after multiple attempts, it is considered an ominous sign. But there has not been any brutal correction so far which bodes well for the bulls.

Close

After the last two days of price action, our confidence in predicting Nifty at 16,000 or beyond in the ongoing rally has certainly shaken a bit, but we would still remain hopeful as long as Nifty holds a strong support zone of 15,600 –15,450.

If these levels are violated then one should get prepared for a decent short-term correction in the market. Until then, better to trade with a positive bias.

During the first half, 15,750 – 15,800 are the levels to watch out for and the first sign of strength would come only after reclaiming 15,800 on a closing basis.

We reiterate that if this has to happen, the banking sector continues to be the key factor as it’s trading around its crucial support area.

Traders are advised to remain light and stick to a stock-centric approach by following strict stop losses. Also, it’s important to keep a close eye on the global developments as well.

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

Tata Metaliks | LTP: Rs 1,193 | Target price: Rs 1,308 | Stop loss: Rs 1,127 | Upside: 10%

The entire Tata Group has done exceedingly well over the last fifteen months and Tata Metaliks, despite being a small-cap constituent, has not disappointed at all.

It has already given a four-fold return in this period and it’s not done yet. The stock slipped into a consolidation mode after registering a new high in the early part of May.

Last Friday, we witnessed good positive traction throughout the session, which resulted in a convincing breakout from the consolidation range. The price action is accompanied by sizable volumes.

Sutlej Textiles and Industries | LTP: Rs 64.30 | Target price: Rs 70 | Stop loss: Rs 58.40 | Upside: 9%

Most of the textile counters have been steady movers in the last few months. This counter has marched northwards with series of higher highs and higher lows.

If we look at the daily timeframe chart, we can observe a typical price pattern where the stock prices suddenly take a leap and then consolidates for some time.

The breakout happens again from the range and a similar sort of price action is repeated. Last Friday, we witnessed a fresh breakout from the congestion phase and considering its recent pattern, we recommend buying on a decline for a short-term price target of Rs 70.

(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.
Sameet Chavan
first published: Jul 12, 2021 07:36 am

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