The Nifty 50 rose over 1 percent in the week ended July 16 and closed above 15,900, which has previously been a stiff barrier to cross. Closing above this level opens the gates for the index to surge past 16,000 and eventually head towards 16,100-16,200.
However, the journey above 16,000 might not be that easy, experts said. As long as the Nifty 50 stays above 15,900 this week, bulls have a fighting chance to surpass 16,000, otherwise some consolidation cannot be ruled out.
There have been several attempts to go past 15,910 in the past month, but on most occasions, staying at higher levels was a struggle. Finally, on the weekly expiry day, the Nifty 50 managed to close at 15,923.40, which is a positive sign for bulls.
The Nifty 50 hit a new high of 15,962.25 on Friday, while the S&P BSE Sensex also hit a life high of 53,290.81, but the big action was in the broader markets.
Reaching 16,000 on the Nifty 50 is “merely a formality”, said Sameet Chavan, chief technical & derivatives analyst at Angel Broking. “After this, 16,200 is the next level to watch out for. We reiterate that if this assumption has to turn into reality, banking needs to contribute and hence, all eyes on the Nifty Bank.”
Chavan added that any sustainable move below 15,630 would apply the brakes on the ongoing optimism and there may be some corrective moves in the short term.
On the weekly chart, the index has formed a small bullish candle carrying a lower shadow, indicating buying support at lower levels. For the past five to six weeks, the index has been consolidating within the 15,900-15,500 range, representing a short-term sideways trend.
“The chart pattern suggests that if the Nifty sustains above 15,900 levels, it would witness buying, which would lead the index towards 16,100-16,300 levels,” said Rajesh Palviya, VP - technical and derivative research at Axis Securities. “However, if the index breaks below 15,800 levels, it would witness selling, which would take the index towards 15,700-15,600.”
The index is in an uptrend in the medium term, so buying on dips continues to be the preferred strategy, Palviya said.
The Nifty 50 is trading above the 20- and 50-day simple moving average (SMA), which is an important short-term moving average, indicating a positive bias in the short term.
Here are the top 10 trading ideas by experts for the next 3-4 weeks:
Rajesh Palviya, VP - Technical and Derivative Research, Axis Securities
Lupin: Buy| LTP: Rs 1180| Buy at Rs 1179| Target: Rs 1240| Stop Loss: Rs 1132| Upside 7%
The Lupin stock has managed to sustain above its earlier breakout zone of Rs 1,120-1,130 for the past five consecutive weeks. At the current weekly close, the stock has surpassed the high of the previous three weeks, which signals increased strength.
On the weekly chart, the stock continues to scale upward, forming higher tops and bottoms, which is a bullish sign.
The stochastic weekly momentum indicator has turned bullish along with a positive crossover, which supports increased momentum.
Prestige Estates Projects: Buy| LTP: Rs 329| Target: Rs 360-380| Stop Loss: Rs 300| Upside 9-15%
On the weekly chart, Prestige Estates has witnessed a “consolidation range” (Rs 320-260) breakout at about Rs 320 levels which signals a resumption of the uptrend.
Huge volumes on the breakout signal increased participation near the breakout zone. The stock is in a strong uptrend as it continues to form a series of higher tops and higher bottoms across all time frames.
The daily and weekly Relative Strength Index (RSI) is above the 50 mark, which supports rising strength. The analysis indicates an upside to Rs 360-380 levels.
BATA India: Buy| LTP: Rs 1615| Buy range 1618-1595| Target: Rs 1685-1730| Stop Loss: Rs 1560| Upside 4-7%
On the weekly chart, the Bata India stock has bounced back from its 38.2 percent Fibonacci Retracement support at Rs 1,561, indicating a strong comeback of bulls.
This buying momentum also emerged from its 50-day SMA support zone, which reconfirms bullish sentiment. Rising volumes around multiple support zone signals increased participation on the correction.
The daily and weekly RSI is in a bullish mode, which supports rising strength as well as momentum. The analysis indicates an upside to Rs 1,685-1,730 levels.
Orient Electric: Buy| LTP: Rs 333| Target: Rs 350-365| Stop Loss: Rs 313| Upside 5-9%
At the Friday close, the stock has broken out of its “cup and handle” pattern at Rs 332 levels on a closing basis along with rising volumes.
On the daily and weekly charts, the stock continues to scale upward, forming higher top and higher bottoms, indicating a sustained uptrend.
This buying momentum was observed from its 20-day SMA support zone (Rs 312), which remains a crucial level to watch for. The daily and weekly RSI are in a bullish mode, along with a positive crossover, which supports rising strength.
The analysis indicates an upside to Rs 350-365. The holding period is three to four weeks for the recommendation.
Expert: Aditya Agarwala, Senior Technical Analyst, YES SECURITIES
Godrej Properties: Buy| LTP: Rs 1577| Target: Rs 1700| Stop Loss: Rs 1500| Upside 7%
The stock has resumed an uptrend after breaking out into an all-time high territory following a narrow consolidation phase. Technical indicator RSI remains in the bull territory, suggesting an extended upside.
L&T: Buy| LTP: Rs 1619| Target: Rs 1770| Stop Loss: Rs 1540| Upside 9%
The stock has resumed its uptrend after the breakout of an ascending triangle pattern neckline placed at Rs 1,590 levels.
Further, volumes have been good in the breakout, confirming an extended uptrend in the coming sessions.
Expert: Mehul Kothari, AVP – Technical Research at AnandRathi
BPCL: Buy above Rs 451| LTP: Rs 447.95| Stop Loss: Rs 435| Target: Rs 480| Upside: 6%
Of late, stocks of oil refining companies have been in a corrective mode and that is why even BPCL gave up almost 10 percent from its recent high of about Rs 494.
At this juncture, the stock is hovering near a rising trend line support on the daily chart. In addition, this support coincides with the placement of 89 DEMA (double exponential moving average).
There is a possibility of a fresh rally in the stock but that requires confirmation. Traders can buy the stock only above Rs 451, with a stop-loss of Rs 435, for an upside target of 480.
Godrej Properties: Buy| LTP: Rs 1577| Stop Loss: Rs 1480| Target: Rs 1780| Upside: 12%
In our previous report, we covered DLF from the Nifty Realty pack since the index gave a major breakout. Godrej Properties is also a heavyweight from the index and is poised for a fresh move.
We expect a faster move in the stock once it closes above Rs 1,580. Traders can go long on the stock at the current price, with a stop-loss of Rs 1,480 for an upside target of Rs 1,780.
RIL: Buy| LTP: Rs 2110| Stop Loss: Rs 2040| Target: Rs 2250| Upside: 6%
The stock will be in limelight due to the upcoming results. Technically, it is turning from the support of 89 DEMA and has a small range breakout in the hourly time frame.
Even the level of Rs 2,000 is a very strong psychological support for the stock. Aggressive traders can go long on the stock at the current market price, with a stop-loss of Rs 2,040 for an upside target of Rs 2,250.
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Sun Pharma: Buy| LTP: Rs 688| Target: Rs 740-760| Stop Loss: Rs 655| Upside 7-10%
The stock touched a 52-week low of Rs 452.25 on October 29, 2020, and a 52-week high of Rs 721.85 on May 11, 2021.
The 200-day DEMA of the stock on the daily chart is currently at Rs 611.06.
The chart shows that the stock is continuously trading at higher highs and higher lows, which is bullish in nature.
Last week, the stock has given the breakout of the “bullish flag” pattern along with high volumes and also has managed to close above the same, so the buying momentum may continue in the coming days.
One can buy in the range of Rs 680-684 for an upside target of Rs 740-760, with a stop-loss below Rs 655.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.