The benchmark Nifty50 surged over 60 percent in just more than 8 months, after hitting the levels of 7,510 in March 2020, driven by buying across sectors.
The major buying was seen in auto, bank, IT, metal, pharma, and financial services indices which gained 50-90 percent from their March lows. The broader markets, too, participated in the run with the Nifty Midcap index rising 60 percent and SmallCap up over 70 percent.
On the monthly basis, after the largest ever bearish candle in March, the Nifty50 has formed bullish candle in six out of eight months. Currently the index reclaimed 12,250 mark.
"Until the market is above the level of 10,800 (previous significant bottom), Nifty would keep rallying. Below 10,800 levels, Nifty would lose its momentum and may even fall to 10,300 levels," Shrikant Chouhan, Executive Vice President (Equity Technical Research) at Kotak Securities told Moneycontrol.
However, on the decisive crossing of 12,400 levels would lift the Nifty to 13,300 levels, he said.
Here are 8 technical buy ideas for this Samvat 2077:
Brokerage: Kotak Securities
Infosys: Buy 50% at Rs 1,097 and balance at Rs 960 | Target: Rs 1,400 | Stop Loss: Rs 850 | Time Horizon: 3 months
The stock is in completely new impulse/trending wave. The stock has formed strong breakout continuation pattern and weekly charts suggest uptrend wave likely to continue in the medium term. The strategy should be to keep buying on dips at crucial supports. Buy 50 percent at current levels and balance at Rs 960. Keep a final stop loss at Rs 850. On the upside, the next wave should end between Rs 1,400/1,440.
Cipla: Buy 50% at Rs 778 and balance at Rs 700 | Target: Rs 840 | Stop Loss: Rs 650 | Time Horizon: 3 months
The stock is forming a 'Cup with Handle' formation on monthly charts. Buy 50 percent at current levels and balance at Rs 700. Keep a final stop loss at Rs 650. On the upside, it could move to Rs 840 levels.
Britannia Industries: Buy 50% at Rs 3,483 and balance at Rs 3,200 | Target: Rs 4,050 | Stop Loss: Rs 3,000 | Time Horizon: 3 months
It is into a fresh technical break out on long-term charts. Currently it is into throwback mode to retest earlier major resistance. Buy 50 percent at current levels and balance at Rs 3,200. Keep a final stop loss at Rs 3,000. On the upside the rally could extend up to Rs 4,000 levels.
ICICI Bank: Buy 50% at Rs 431 and balance at Rs 375 | Target: Rs 500 | Stop Loss: Rs 350 | Time Horizon: 3 months
The stock fallen vertically during the period of lockdown and the COVID-19 crisis. It was at Rs 550 in the month of February 2020 and fallen to Rs 268 levels by the end of March 2020. It is also under the pressure of sectoral weakness. However, technically, it is into gradual pull back on the upside and we could expect Rs 480 in the near term from it. Buy 50 percent at current levels and balance at Rs 375. Keep a final stop loss at Rs 350. On the upside the rally could extend up to Rs 480 levels.
Dalmia Bharat: Buy 50 percent at Rs 838 and balance at Rs 770 | Target: Rs 1,075 | Stop Loss: Rs 700 | Time Horizon: 3 months
The entire cement space is buzzing heavily. Now we need to take a 'Top Down' approach. The stock is following to the formation of trending wave. It is moving upward with a frequent consolidation, which is bullish for the stock. Technically, after crossing the crucial level of Rs 920, it would arrest only at Rs 1,075. Buy 50 percent at current levels and balance at Rs 770. Keep a final stop loss at Rs 700. On the upside the rally could extend up to Rs 1,075 levels.
Brokerage: HDFC Securities
Amara Raja Batteries: Buy Range Rs 789.75-800 | Target: Rs 890-940 | Stop Loss: Rs 640 | Time Horizon: Till next Diwali
The stock price has broken out from the downward sloping trend line on the monthly charts. Stock price has been trading above all important moving averages which indicates bullish trend on all time frames.
Stock has been forming higher tops and higher bottoms on daily and weekly charts. Momentum Indicators and Oscillators have been showing strength on medium to long term charts. Auto sector has been outperforming for last many months. Nifty Auto is looking strong on the medium to long-term charts.
Considering the technical evidences discussed above, we recommend buying the Amar Raja batteries in Rs 789.75-800 band and average at Rs 690, for the upside targets of Rs 890 and Rs 940, keeping a stop-loss on closing basis at Rs 640.
Axis Bank: Buying Range Rs 520-525 | Target: Rs 590-640 | Stop Loss: Rs 448 | Time Horizon: Till next Diwali
After a sharp decline in the month of September 2020, the stock price of Axis Bank Ltd has witnessed an excellent upside bounce in the subsequent month of October 2020. Currently, the stock price is making an attempt to move above the multi-month hurdle of Rs 520-530 levels.
We observe a bullish sequence of higher tops and bottoms on the monthly timeframe chart. The stock price has also moved above the hurdle of monthly 10 period of EMA. The resistance of 20 EMA is now placed at Rs 550.
The monthly 14 period RSI has sustained above 40-45 levels and is gradually moving up. As per its range movement of 30-60 levels, the monthly RSI is expected to move up to 60 levels (from the current reading of 47).
Considering the Technical evidences discussed above, we recommend buying Axis Bank at CMP and average at Rs 475, for the upside targets of Rs 590 and Rs 640, keeping a stop-loss on closing basis at Rs 448.
Ceat: Buying Range Rs 1,100-1,130 | Target: Rs 1,230-1,425 | Stop Loss: Rs 922 | Time Horizon: Till next Diwali
Stock price has surpassed the crucial resistance of its previous top placed at Rs 1,076 on the monthly chart. Stock price has also taken out the resistance derived from the 50 month EMA, placed at Rs 1,031.
From the Month of April to September 2020, Volume rose along with the gradual price rise. In the month of October 2020, stock price has risen with momentum and broke out from the long-term resistance. Monthly Indicators and Oscillators like DMI, MACD and RSI have shown fresh buying signals on the charts.
Auto Sector has done exceptionally well since March 2020 bottom. Auto Ancillary space is also expected to continue their outperformance in the coming months.
Considering the Technical evidences discussed above, we recommend buying the stock at Rs 1,100-1,130 and average at Rs 1,000, for the upside targets of Rs 1,230 and Rs 1,425, keeping a stoploss on closing basis at Rs 922.Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.