Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas, says 15,000 will be the vital level to watch out for during the week and if the Nifty manages to go past it, the bulls will be back in control.
In an interview to Moneycontrol’s Kshitij Anand, he says earning reports, too, would be keenly followed but investors, as well as traders, should be stock or segment-specific in their approach. Edited excerpts:
It was a volatile week for Indian markets after a holiday-shortened week. The Nifty closed flat-to-positive. What led to the price action?
The Nifty50 witnessed volatile action in the week gone by and formed a Doji pattern on the weekly chart. Also, on the weekly chart, the Nifty found support near the lower end of the medium-term rising channel and the 20 WMA.
So, the index has strong support on the downside near 14,400 and is recovering from there. At the same time, 15,000 is acting as a stiff barrier on the upside, which is keeping the rise in check.
One sector that stood out was the metal segment. A lot of stocks in the metals index hit a fresh 52-week high. What led to the price action and how should investors play the theme? Any stocks that are still looking attractive?
We have been bullish on the metal sector for the last two weeks. The sector had a short-term correction in the month of March that unfolded in a channelised manner.
Towards the end of March, the channel broke out on the upside with which we turned positive. Since then the metal index witnessed a swift rally.
As a result, the short-term momentum indicators have been pushed into the overbought zone. So there is scope for a short-term consolidation.
Yes, the traders, as well as investors, need to have exposure in the metal stocks, however, they need to wait for a fresh setup to take a fresh entry.
What should investors watch out for in the coming week?
With the start of the result season, there will be plenty of action in the market. However, traders and investors need to take a stock-specific or sector-specific approach.
One sector that is doing well as a theme is pharma and there is further upside potential in this space from a short to medium-term perspective
How is the market likely to pan out in the coming week? Important levels to watch out for the Nifty?
Going ahead, the psychological level of 15,000 will continue to be the key level to keep a tab on. The bulls need to take out that level in order to turn the table in their favour.
Once 15000 gets taken out on a closing basis, then the index will be poised to test the all-time high of 15,431. On the other hand, 14570-14500 will act as a near-term support zone
Small and mid-caps outperformed. What is leading the price action?
The broader market indices are witnessing a good amount of traction since the last couple of weeks. While the Nifty is struggling to sustain above its crucial short-term moving averages, the broader market indices are trading way above their respective averages.
These indices are set to surpass their March highs, which will further add to the bullish structure. So we are expecting the outperformance to continue.
Top three-five trading ideas for the next three-four weeks?
Here is a list of top trading ideas for the next three-four weeks:
Lupin: Buy| LTP: Rs 1079| Stop Loss: Rs 1040| Target: Rs 1180| Upside 9%
The stock has broken out on the upside from a multi-week consolidation. The daily momentum indicator is in line with the price breakout. The rally is starting from the key weekly moving averages, so it is likely to sustain at higher levels.
IGL: Buy| LTP: Rs 542| Stop Loss: Rs 518| Target: Rs 594| Upside 9.5%
The stock is witnessing an inside bar breakout on the weekly chart, which is leading to a swift rally. On the way up, it has surpassed certain crucial swing highs. The short-term momentum indicators are in sync with the bullish structure.
Bharti Airtel: Buy| LTP: Rs 545| Stop Loss: Rs 523| Target: Rs 596| Upside 9%
The stock was in an accumulation phase throughout the month of March. In the last week, it has moved out of that accumulation.
Structurally, it is starting a fresh leg on the upside, which indicates significant upside potential for the short term.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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