The week gone by started on a sluggish note by but proceeded to log heft gains in the last three sessions breaking the three-week losing streak for Nifty.
The domestic market had been considerably underperforming the global peers, but with this smart rally, we finally managed to catch up with them.
Month-on-month, we saw Nifty end lower but looking at the intra-month activity, the index managed to conclude May at the highest point of the on a closing basis.
Going by the famous idiom ‘all is well that ends well’, the bulls must be a bit relieved now.
The weakest link - the banking space - took charge as the Nifty got elevated beyond 9,500.
Nifty has now reached to the immediate target of 9,450-9,500, but the way charts are shaped up, we expect the index to test the higher end of the downside gap area of 9,532-9,731 created on May 04, 2020 (or may even head higher).
On the flip side, 9,450 followed by 9,380 would now be seen as sacrosanct support.
Last week’s rally was propelled by the banking space and historically it is proven, whenever the banking conglomerates start participating in any rally, it is considered to be a robust one.
Hence, traders should look to use declines to go long. The stock-centric approach would fetch better trading opportunities as well as the higher potential gains.
Here are two buy recommendations for the next 3-4 weeks.
Vinati Organics | Buy | LTP: Rs 1,020 | Target price: Rs 1,095 | Stop loss: Rs 976 | Upside: 7%
The entire Chemical space has been doing well for quite some time now. And again after a brief pause, they have resumed their higher degree uptrend.
After undergoing a strong corrective phase in the March month's mayhem, the stock has given a stupendous recovery from sub 700 levels.
Recently, stock prices consolidated around its 200-day SMA for nearly three weeks; but last Friday, the stock went on to traverse this hurdle with some authority thanks to strong buying interest.
Kajaria Ceramics | Buy | LTP: Rs 342.60 | Target price: Rs 378 | Stop loss: Rs 316 | Upside: 10%
The last four months have been terrible for this counter as the stock prices corrected nearly 50 percent from its January highs.
Last week, this correction somehow got arrested around its multiyear supports and in the last couple of trading sessions, the stock prices witnessed a strong surge.
Now looking at the daily chart, we can see the stock prices closing convincingly above 20-day EMA for the first time in the last three months.
In addition, the weekly chart depicts a confirmation of a Bullish Hammer pattern at a strong support zone.
(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.