The benchmark indices closed the week ended June 25 with gains of over 1 percent each but the big action was in the small and midcap space that outperformed the Sensex and the Nifty on a weekly basis.
The Nifty, which closed a shade below 15,900, is on track to hit 16,000 in the July series but experts advise caution as most bounces towards 16,000 have faced strong selling pressure.
The big resistance levels to watch out for will be in the 16,000-16,100 range, while on the downside, support is placed at 15,450-15,500 levels, say experts.
Unlike June, which is historically a month of consolidation and deceleration, July has a reputation for high action and expanded moves.
“The seasonality factor score indicates an average growth rate around +3.57 percent when we look at the last five years, which saw a negative return of 5.69 percent in 2019, while the rest of the years saw an uptick within the range of 5-7.5 percent,” Sacchitanand Uttekar, DVP–Technical (Equity), Tradebulls Securities, said.
“Technically, the index is clinging to its ongoing pitchfork indicator range with 16,040 being the breakeven zone to unlock upward momentum towards 16,530, while on the downside, the recent bullish hammer swing low around 15,450 holds the key for any bearish uncertain moves,” he said.
Rajesh Palviya, VP-Technical & Derivative Research, Axis Securities, said the overall range for the July series is at 16,000-16,500 on the upside and 15,500–15,300 on the downside, with intermediate levels of 16,200 and 15,200, respectively.
Here are 10 trading ideas from experts for the next three-four weeks:
Expert: Sacchitanand Uttekar, DVP – Technical (Equity), Tradebulls Securities
SBI witnessed a breakout from a ‘V’ price pattern formation in May around 405 levels. After the initial up move, the stock saw a pullback towards its breakout zone.
The recent development of a bullish engulfing formation on the weekly scale is a reconfirmation of an elevated base around 400.
The level also coincides with its five-week exponential moving average (EMA) level, while its daily RSI has seen a strong rebound from its 50 zones and a crossover of its trigger line above 60, which complements the ongoing bullish move.
‘Piercing line’ formation on its daily scale around its 200-week EMA zone marked the termination of its ongoing bearish move. With its weekly RSI now placed around 49 zone, we can expect a quick upsurge once it crosses 50 zone.
The corresponding level to track during the week would be around 2,980, its 200-day EMA, above which we expect the impending up move to witness acceleration. Fresh longs could be added with a weekly closing stop below 2,850.
Positive sector outlook. The ‘morning star’ formation on the daily scale around its trend line support reaffirms the trend strength.
A breakout above the neckline level of 1,580 will activate the inverse head and shoulder formation, which is at its maturing stage since February 21.
Positive sector outlook. A piercing line formation has occurred near its 20-week EMA support zone.
Daily RSI crossover around 51 with its daily volumes crossing its 5-day average is a good sign of incremental strength. Trading longs could be deployed for an immediate up move towards 170.
Expert: Sameet Chavan, Chief Technical & Derivatives Analyst at Angel Broking
The stock has been consolidating with small corrections in between since the beginning of April. Recently, the declining trend seems to have been arrested around Rs 750 which coincided with the 89-EMA on the daily chart.
The stock prices rebounded well from this important support zone and now with a smart upmove on June 25, we can see the configuration of a bullish cup and handle on the daily timeframe.
Since it’s backed by more than average daily volumes, we recommend going long for a short-term target of Rs 906.
Life insurance companies have been doing well for the last few months. They have been holding their ground firmly during the in-between corrective phases the broader market has been experiencing.
This stock seems to have cemented its position around Rs 970–Rs 950, which is the earlier breakout point.
Last week, its peer counters had a good move but it remained quiet. Now looking at the price action of June 25, we expect this stock to catch up with peers.
Expert: Rajesh Palviya, VP - Technical & Derivative Research, Axis Securities
On the daily chart, the stock has witnessed a “consolidation range” breakout around 470, which signals a resumption of the uptrend.
Huge volumes on the breakout signals 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 bottom formations across all time frames.
This buying momentum was observed from the 20-day SMA placed at Rs 438, which reconfirm our bullish thesis. The daily and the weekly strength indicator such as RSI are placed above the 50 mark, which support rising strength.
The above analysis indicates an upside of 555-580 levels. The holding period for the positional call is between three to four weeks
With the current close, the stock has broken out from its “multiple resistance zone” placed around Rs 3,350 on a closing basis along with rising volumes.
On the daily chart, the stock has also formed a higher top and higher bottom formation, indicating shift of trend upwards.
The stock is placed above its 20, 50-day simple moving average (SMA) and averages are also inching upward along with prices, which reconfirms positive bias.
The daily and the weekly strength indicator such as RSI are in a bullish mode along with a positive crossover that supports rising strength.
The above analysis indicates an upside of 3,500-3,600.
On the daily chart, the stock has decisively broken out from the “Pennant”, a continuation pattern representing resumption of up move
On the daily and the weekly charts, the stock continues to scale upward, forming a series of higher tops and bottom formations that indicate a strong up trend.
The stock is well placed above its 20, 50, and 100-day SMA, which supports bullish sentiment on the medium-term time frame
The daily and the weekly strength indicator RSI is quoting above the 50-mark and in a bullish mode that supports rising strength. The above analysis indicates an upside of 101-110 levels.
Brokerage Firm: SMC Global Securities Ltd
The stock closed at Rs 122.70 on June 25, 2021. It made a 52-week low at Rs 60.35 on November 2, 2020, and a 52-week high of Rs 124.80 on May 11, 2021.
The 200-day (EMA) of the stock on the daily chart is at Rs 93.37.
The stock is trading in higher highs and higher lows sort of “Rising Wedge” on the weekly charts, which is bullish in nature.
Last week, the stock closed with gains of 9 percent and managed to close on the verge of a breakout of a pattern along with high volumes. Buying momentum may continue in the coming days.
One can buy in the range of 119-120 for an upside target of 135-137 with a stop loss placed below 112 levels.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.