The eventful election result week was followed by a head start on May 27 as Nifty once again started its march towards 12,000. During the week, it managed to reclaim the milestone but, somehow, was unable to sustain above it.
In fact, on May 31, everything looked hunky dory, and Nifty was all set to hit fresh record highs. But, suddenly from nowhere, Nifty heavyweights nosedived. In a blink of an eye, the index was nearly 200 points down.
Fortunately, this selling was absorbed by buyers waiting at lower levels. Hence, a recovery thereafter pushed the index above 11,900 to register a highest-ever weekly close.
During the week, we clearly witnessed consolidation. This is quite evident as the overall uncertainty is behind us post the favourable election verdict for the Bharatiya Janata Party.
In fact, it is a typical characteristic of a market, which never gives easy money when the trade becomes obvious. It is known for giving sharper moves when they are least expected.
Now, as far as levels are concerned, 11,600-11,500 has become a near-term base. For the forthcoming week, 11,840 can be seen as a sacrosanct level.
Till the time, we are above these levels. The bias remains positive, and we expect a gradual march towards 12,050-12,200.
Having said that, one needs to be very fussy now while selecting a stock as we saw on May 31 that we cannot just become complacent.
During the week, the IT index had an encouraging move after recent underperformance. In fact, it was the only heavyweight pocket that could post steady gains throughout the week.
Apart from this, there is nothing much to comment on the sectoral front. Hence, we need to closely observe how individual pockets perform in the first couple of days of this week, which would give some idea about potential movers.
Here are two stocks that could give 8-10 percent return in the next 14-21 sessions:
Godrej Consumer: Buy| LTP: Rs 688.05| Target: Rs 760| Stop loss: Rs 648| Upside: 10 percent
After undergoing a difficult time for nearly 6-8 months, we saw the first sign of revival on May 31. On the daily chart, stock prices have broken above the last one month’s higher range, which was acting as a stiff resistance and now indicates a change in polarity.
The said breakout is supported with a good increase in volume and strong bullish candle. In addition, prices have closed above 89 EMA, which indicates that the short to medium term trend has turned positive.
Hence, we sense a strong upside in the near term. Thus, we recommend buying at current levels for a target of Rs 760, and the stop loss should be fixed at Rs 648.
Raymond: Buy| LTP: Rs 828| Target: Rs 897| Stop loss: Rs 804| Upside: 8 percent
Recently, we witnessed a sheer outperformance from this traders’ favourite high beta midcap name. The stock remained sideways with no real participation in the broader market destruction.
On May 31, when the midcap universe started showing signs of revival, this stock showed its supremacy by clocking colossal move to surpass its recent congestion zone convincingly.
Looking at the volume activity and other trends following indicators which are pointing upwards, we expect the stock to give a decent move in days to come. In the week gone by, the stock has come off a bit which provides a better opportunity to go long.
Thus, we recommend buying at current levels for a target of Rs 897 with a stop loss at Rs 804.
The author is Chief Analyst- Technical & Derivatives, Angel Broking.
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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