We are still hopeful and expect the market to break out in the upward direction. On the higher side, 11950-12,000 has become a sturdy wall to cross
It was yet another week of consolidation for our markets in the absence of major triggers. The index started off well with some hope of surpassing the stiff hurdle of 12,000, but once again the attempt turned unsuccessful.
During the remaining part of last week, the index kept oscillating around the lower end of the range to eventually conclude a tad above the 11,800 mark.
Although the markets consolidated last week, the overall bias remained on the negative side, and hence any intra-week pull back was getting sold into.
Now, with this price development, we can see the trading range getting shrunk further. Whenever this happens, we will get a breakout (on either side) from the congestion zone.
On the lower side, 11,769 is the level to watch out for. Any sustainable move below this could trigger a sell-off and the index is likely to head towards 11,600-11,550 levels.
However, looking at the broader picture, we are still hopeful and expect the market to break out in the upward direction. On the higher side, 11,950-12,000 has become a sturdy wall.
At this juncture, the pragmatic strategy would be to stay light and wait for a breakout from the mentioned range to create aggressive positions. Meanwhile, keep focusing on individual stocks that are providing better trading opportunities.
Here is a list of two stocks that could offer 7-10 percent return in the next 14-21 sessions:
PI Industries: Buy| Target: Rs. 1170.05| Target: Rs 1250| Stop Loss: Rs 1128| Upside 7%
Despite the overall broader market destruction, this stock has been maintaining its sturdy structure for a long time. On Friday, this stock bucked the trend and in the process managed to give yet another breakout to clock fresh record highs.
If we look at the volume activity, it has risen substantially; providing credence to the price development. We expect this outperformance to continue and fresh leg of the rally to unfold in days to come.
Thus, we recommend buying at current level for the target of Rs 1250 and a stop loss should be fixed at Rs 1128.
Wockhardt: Buy| LTP: Rs 387.25| Target: Rs 424| Stop Loss: Rs 373| Upside 10%
The entire ‘Pharmaceutical’ space has been undergoing a difficult period and there has been no respite even after underperforming for nearly four years now.
The ‘Nifty Pharma’ index is trading at its multi-year lows and on Friday, we saw some signs of near term bounce. Some of the larger peers rebounded sharply to provide some ray of hope for this beaten down sector.
We like’ Wockpharma’ because it has been making valiant efforts to surpass its hurdle of Rs 400, which would unfold a strong upward rally.
But before this, we have been witnessing some buying at lower levels and hence, with an anticipation of a breakout, we recommend buying at current levels for a target of Rs 424 and the stop loss should be fixed at Rs 372.
(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.