By Jigar S Patel, Senior Manager - Equity Research at Anand Rathi
Once again, it was a historic week, ending July 12, for the domestic markets as the benchmark indices achieved new milestones. The Nifty 50 spot index reached a high near the 24,600 mark and closed above 24,500, marking a gain of approximately 0.73 percent from the previous week. Meanwhile, the BSE Sensex surpassed the 80,000 level and closed above 80,500. This surge in the markets was primarily driven by IT stocks, as we have highlighted in recent weeks. The Nifty index confirmed another breakout above the 24,400 level, indicating potential movement towards the 25,000 mark. However, it is important to note the strong index management at play. Previously, Reliance Industries was the driving force behind the rally, and this time, it was the IT sector.
In the broader markets, the PSU space remains active and vibrant. On the data front, the foreign institutional investors (FIIs) long-short ratio in index futures reached 84 percent during the week and is now hovering around 80 percent. This trend might not be favourable for the markets in the coming weeks. It appears that the markets are determined to maintain their upward trajectory until the budget announcement in 2024. Consequently, traders are advised to focus on specific stocks and adhere to strict stop-loss strategies in their long trading positions. On the downside, only a breach of the 24,200 level might interrupt the ongoing momentum.
The Nifty Bank index exhibited a sideways to negative trend throughout the week, concluding with a decline of approximately 0.72 percent. On the weekly chart, we observed the formation of several reversal candlestick patterns, signaling potential shifts in market sentiment. Looking ahead, a close below the 51,700 level could escalate the selling pressure on banking stocks, potentially dragging the index down to the 51,000 and subsequently the 50,000 levels. Conversely, if the index manages to close above the 52,800 level, we may see a resumption of upward momentum. These critical levels will be key in determining the future direction of the Nifty Bank index.
Here are three buy calls for short term:
MRPL | CMP: Rs 240
In recent weeks, Mangalore Refinery and Petrochemicals (MRPL) has been consolidating within a price range of Rs 210-230. However, the stock has recently exhibited a decisive breakout, accompanied by substantial trading volume, indicating a potentially attractive buying opportunity at this juncture. From a technical analysis perspective, the daily MACD has formed a bullish crossover just above the zero line, further signaling a positive outlook for the stock. Based on these indicators, it is advisable to consider adding long positions within the Rs 235-245 range.
Strategy: Buy
Target: Rs 270
Stop-Loss: Rs 225
Hikal | CMP: Rs 360.45
Between March 2023 and June 2024, Hikal has been consolidating within the approximate range of Rs 260-320. Recently, the stock broke out of this range with significant trading volume, making it an attractive buy opportunity. Despite a rally of nearly 40 rupees post-breakout, it is recommended to purchase on any dips. From a technical standpoint, the daily MACD (moving average convergence divergence) has formed a bullish crossover just above the zero line, indicating a positive trend. Therefore, it is advisable to buy within the Rs 335-350 range, aiming for an upside target of Rs 425. To mitigate risk, a stop-loss should be set at Rs 315 on a daily closing basis.
Strategy: Buy
Target: Rs 425
Stop-Loss: Rs 315
Birlasoft | CMP: Rs 732.35
Recently, Birlasoft has successfully surpassed its critical resistance level of Rs 720 and is now holding steady around the Rs 730 mark. This breakout, characterized by substantial trading volume, is a promising indicator of the stock's potential upward movement. From a technical analysis standpoint, the daily Relative Strength Index (RSI) has rebounded from the 50 level, suggesting renewed strength and making the current price levels especially appealing for investors. Based on these factors, it is advisable to consider purchasing shares within the Rs 720-735 range, targeting an upside potential of Rs 780. To manage risk prudently, a stop-loss should be implemented near the Rs 699 level on a daily closing basis.
Strategy: Buy
Target: Rs 780
Stop-Loss: Rs 699
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
Disclaimer: MoneyControl is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
