The market rebounded sharply during the week ended December 3 despite consistent FII selling, after sharp sell-off in previous week. The Nifty50 had breached 17,000 on closing basis, but the smart recovery in following two days helped the index return and hold that crucial levels.
Despite correction on Friday, the index managed to settle with a percent gains during the week to close at 17,197. The broader markets - the Nifty Midcap 100 and Smallcap 100 indices also gained 1 percent each. Experts remain cautious given the directionless trend and feel the index needs to surpass and close above 17,900 for strong uptrend.
"Direction wise, we continue to remain cautious and there is no doubt we are still in a 'Sell on rise' kind of market. This view will remain intact as long as Nifty does not surpass 17,900 which is the confluence point of two key trend lines," says Sameet Chavan, Chief Analyst-Technical and Derivatives at Angel One.
He further says also sooner or later they expect the recent low around 16,800 is to be breached soon; but it will happen immediately or after some more consolidation in the range of 16,800 – 17,500.
Meanwhile, he advised that traders can continue with a stock specific approach. "And we may see trades on both sides if Nifty remains in a consolidation mode. But it would be a prudent strategy to keep booking timely profits and considering the volatile nature of global markets, carrying aggressive bets overnight should be strictly avoided."
As far as levels are concerned, Sameet Chavan says 17,350 – 17,500 – 17,600 are to be considered as immediate hurdles; whereas on the flipside, 17,000 – 16,800 should be treated as a cluster of support.
Here are top 10 trading ideas by experts for the next 3-4 weeks. Returns are based on December 3 closing prices:
Expert: Vijay Dhanotiya, Lead Technical Research at CapitalVia Global Research
Bata India: Buy | LTP: Rs 1,895.40 | Stop Loss: Rs 1,750 | Target: Rs 2,250 | Return: 18.7 percent
The stock is trading near the lower band of an ascending channel. We expect a reversal from the support of lower band of the channel.
It has also taken a support of EMA (exponential moving average) 100 line. We have observed indicators like MACD and RSI (relative strength index) indicating the momentum in the stock is likely to continue.
We recommend a buy above Rs 1,950 with a target of Rs 2250 and a stop loss of Rs 1,750.
TCS: Buy | LTP: Rs 3,640.45 | Stop Loss: Rs 3,350 | Target: Rs 4,000 | Return: 9.9 percent
The stock has reversed from the support level near Rs 3,400. It has reversed after retesting the level of ascending triangle it has given the breakout in the past.
It has also got the support of 200 EMA line. We recommend a buy above Rs 3,670 with a target of Rs 4,000 and a stop loss of Rs 3,350.
Jubilant Foodworks: Buy | LTP: Rs 3,800.55 | Stop Loss: Rs 3,500 | Target: Rs 4,550 | Return: 19.7 percent
Jubilant Foodworks is trading in an ascending channel and has taken the support of 100 EMA line. We expect a reversal in the stock from the lower band of the channel.
We have observed indicators like MACD and RSI indicating the momentum in the stock. We recommend a buy above Rs 3,850 with a target of Rs 4,550 and a stop loss of Rs 3,500.
Expert: Nagaraj Shetti, Technical Research Analyst at HDFC Securities
Glaxosmithkline Pharmaceuticals: Buy | LTP: Rs 1,731.05 | Stop Loss: Rs 1,620 | Target: Rs 1,920 | Return: 10.9 percent
The weekly timeframe chart of Glaxo indicates an uptrend in the last couple of weeks. The stock price has moved above the crucial trend line resistance and also a larger consolidation pattern of around Rs 1,710 levels on Thursday and is currently trading higher. This is positive indication.
Further sustainable upmove from here could open a sharp upside breakout of the hurdle for the near term. Volume has started to expand during upside breakout in the stock price and weekly RSI shows positive indication. Hence, one may expect further strengthening of upside momentum in the stock price ahead.
Buying can be initiated in Glaxo at CMP, add more on dips down to Rs 1,670, wait for the upside target of Rs 1,920 in the next 3-4 weeks. Place a stoploss of Rs 1,620.
Gujarat Fluorochemicals: Buy | LTP: Rs 2,486.55 | Stop Loss: Rs 2,310 | Target: Rs 2,740 | Return: 10.2 percent
After showing minor weakness in the last two weeks, the stock price showed a decisive upside breakout on Friday and closed higher. The stock price has moved above the resistance of Rs 2,230 levels and closed higher.
The larger positive sequence like higher tops and bottoms is intact for many months. This reflects an intermediate uptrend in the stock price. Volume has expanded on Friday during upside breakout and the weekly 14 period RSI shows positive indication.
One may look to buy Gujarat Fluorochemicals at CMP, add more on dips down to Rs 2,380 and wait for the upside target of Rs 2,740 in the next 3-4 weeks. Place a stoploss of Rs 2,310.
Aegis Logistics: Buy | LTP: Rs 247.50 | Stop Loss: Rs 230 | Target: Rs 274 | Return: 10.7 percent
The sharp trended decline seems to have completed in this stock, as the stock price bounced back sharply in the last two weeks. We also observed a bullish reversal type weekly candle pattern in the last two weeks which signal a formation of important bottom reversal for the stock price at Rs 191.75 levels in the last week.
The sharp rise in the volume during upmove in the stock price could indicate buildup of long positions. Weekly 14 period RSI and weekly ADX/DMI (Average Directional Index / Direction Movement Index) shows positive indication.
One may look to buy Aegis at CMP, add more on dips down to Rs 238 and wait for the upside target of Rs 274 in the next 3-4 weeks. Place a stoploss of Rs 230.
Expert: Sameet Chavan, Chief Analyst-Technical and Derivatives at Angel One
ONGC: Buy | LTP: Rs 145.90 | Stop Loss: Rs 139 | Target: Rs 152 | Return: 4.2 percent
This stock had a spectacular run from mid-August lows (Rs 108.50) to Rs 170 plus levels in merely 8 – 9 weeks. In this move, the volume activity rose substantially, indicating tremendous buying interest in this counter.
However after the initial part of the week, the stock prices slipped into a corrective mode. The price decline has been gradual in nature and in the process, formed a 'Downward Sloping Channel' where both ends of this pattern were tested on a multiple occasions.
Now stock prices have reached its cluster of support where multiple technical evidences converge. Hence, there is a possibility of the recent corrective phase getting completed and the stock may move upwards from here. We recommend buying around Rs 143 for trading target of Rs 152. The stop loss can be placed at Rs 139.
Expert: Shrikant Chouhan, Head - Equity Research (Retail) at Kotak Securities
Larsen & Toubro: Buy | LTP: Rs 1,801.25 | Stop Loss: Rs 1,760 | Target: Rs 1,900 | Return: 5.5 percent
It is consolidating above the 50-day SMA (simple moving average). On Friday, it was one of the best-performing stocks, however, due to widespread weakness; we saw the liquidation of long positions towards the end.
We should be buyers in stock at Rs 1,800 and Rs 1,770. However, we need to protect the long positions with a stiff stop loss at Rs 1,760. On the upside, Rs 1,850 and Rs 1,900 would be the biggest hurdles.
Coforge: Buy | LTP: Rs 5,350.15 | Stop Loss: Rs 5,000 | Target: Rs 5,800 | Return: 8.4 percent
The stock is in a corrective pattern after reaching the level of Rs 6,000. The range of corrective patterns is between Rs 6,000 and Rs 4,700, which is quite large. This type of price correction usually results in the stock forming either a rectangle or a triangle.
Based on the daily chart, it is forming a triangle and the price is accumulating between 20 and 50-day averages. Our strategy should be to buy partially at the current level and keep the balance at Rs 5,100 and for that stop loss at Rs 5,000. On the upside, the Rs 5,600 and Rs 5,800 will be major resistance to the market.
IndusInd Bank: Sell | LTP: Rs 951.15 | Stop Loss: Rs 970 | Target: Rs 880 | Return: (-7.5) percent
It was around Rs 1,242 and from there the stock dropped all the way to Rs 876. Last week, we saw some recovery in the stock from lower levels; however, the rally got arrested at Rs 960, which was previously a resistance for the stock.
Based on its technical pattern, our advice is to sell the stock from a short-term perspective. Keep stop loss at Rs 970. On the downside, the stock has support at Rs 915 and Rs 880.
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.
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