The truncated week saw both Nifty50 and Sensex rallying by over two percent each thanks to positive global cues, but the current week is likely to be dominated by upcoming March quarter results from India Inc., rise in COVID cases, and monetary policy committee (MPC) meeting.
Along with global cues, domestic signals back home will play an important role in guiding market direction. The Nifty50 closed above the crucial level of 14,800 which is a positive sign but could face some resistance around 15,000-15,100 levels.
The results from India Inc. will start coming from Monday but top IT majors such as TCS (12 April), Infosys (14 April), MindTree (15 April), Wipro (15 April), as well as HDFC Bank (17 April) from the banking space, will announce their results next week.
Hemant Kanawala, Head – Equity, Kotak Mahindra Life Insurance Co. Ltd told Moneycontrol: "As we are entering the earnings season, investors' focus will shift to corporate commentary along with the results to get guidance for the future outlook. The Nifty is trading at P/B of 4.2, which is close to post-GFC (global financial crisis) high."
"The second wave of COVID and high valuation are expected to maintain volatility in the markets in the near term," he said.
The monetary policy committee (MPC) of the Reserve Bank of India (RBI) will begin its three-day huddle on April 5 to decide lending rates and the decision on key rates, among others, and will submit its conclusions on April 7.
All eyes, however, will be on RBI's commentary on growth and inflation and how the central bank sees the resurgence of COVID-19.
Lakshmi Iyer, CIO (Debt) & Head Products, Kotak Mutual Fund, told Moneycontrol that there is a case for status quo policy and extended pause in the stance.
Also Read: Dalal Street Week Ahead: Here are 10 key factors that will keep traders busy
Technically, the Nifty50 closed above the 50-Days Moving Average (DMA), which is a positive sign for the bulls. The Nifty has been forming higher lows from the last four trading sessions and has managed to cross a recent swing high that bodes well for the bulls.
It formed a Bullish candle with a long lower shadow indicating that buying was seen on declines. “The index has to hold above 14,800 to witness an up move towards 15,000-15,100 while on the downside support exists at 14,700-14,600 levels,” Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd told Moneycontrol.
“Going ahead, Indian markets are likely to track global cues after the recent announcement of an infra investment plan by the US President. Domestically, concerns over the fast-spreading second wave of COVID in India continues to remain and the fear of possible lockdowns prevail,” he said.
We have collated a list of top 10 trading ideas by experts for the next three-four weeks:
Expert: Vikas Jain, Senior Research Analyst, Reliance Securities
Hero MotoCorp: Buy| LTP: Rs 2,958| Buy range: Rs2,930-2,965| Target: Rs3,300| Stop Loss: Rs 2,780| Upside 11%
The stock has taken support at around its 13-month exponential moving average (EMA), post a higher level of profit-booking. The relative strength index (RSI) has moved higher from its lower range and will resume its uptrend with positive price action.
We believe that the stock has completed its eight-week fall and closed in a positive Doji on weekly charts, confirming a reversal trend.
Long position can be initiated in the range of Rs 2,930-2,965 with a target of Rs 3,300 and stop loss of Rs 2,780.
Britannia Industries: Buy| LTP: Rs3,618|Range: Rs 3,600-3,620| Target: Rs3,830| Stop Loss: Rs3,320| Upside 6%
The narrow ranges in the past two quarters are sloping upwards with positive momentum in the sector. The stock is trending higher with strong delivery-based volumes.
Major technical indicators on the near-term timeframe chart are in buy mode. A long position can be initiated in the range of Rs3,440-3,510 with a target of Rs3,830 and a stop loss of Rs3,320.
Torrent Pharma: Buy| LTP: Rs2,549| Range: Rs2,520-2,548| Target: Rs2,800| Stop Loss: Rs2,340| Upside 10%
Last week, the stock gave a breakout from its inside range of the previous week's candle. We expect an upward breakout from the current levels with positive price momentum.
The sector is in a positive momentum and RSI trading upwards from its average line on daily charts. In case of breakdown, its 21-month average (which is placed at Rs2,300 levels) would act as strong support.
Long position can be initiated in the range of Rs2,420-2,465 with a target of Rs2,800 and a stop loss of Rs 2,340.
Expert: Mehul Kothari, AVP – Technical Research at AnandRathi
Balrampur Chini: Buy| LTP: Rs 214| Stop Loss: Rs 190| Target: Rs 250| Upside 16%
Recently, Balrampur Chini confirmed a breakout from its multi-year high of 200. This breakout has occurred after a consolidation of 14 years. The theoretical target for the same comes around 340 levels in the longer run.
However, in the short-term, the stock travelled above the 225 mark and is again available near 210 due to the correction.
Even for short-term traders, the current price has a decent risk-to-reward ratio for an upside of around 15 percent to 29 percent.
Thus, traders are advised to buy the stock in the range of 214 - 206 with a stop loss of 190 for the upside potential target of 250 in the next 3-5 weeks.
Bank of Baroda: Buy| LTP: Rs 75| Stop Loss: Rs 68| Target: Rs 85| Upside 13%
Following the rally in the entire PSU pack, Bank of Baroda underwent a fantastic round from 64 to 99 in a span of just three weeks.
Post the rally, the stock corrected and is now trading near the 70 mark. On the daily chart, it is trading close to the previous demand zone.
On the weekly scale, it is resting at Ichimoku support. The price action indicates that PSU Banks are preparing for a fresh upside.
Thus, traders are advised to buy the stock in the range of 75 - 72 with a stop loss of 68 for the upside potential target of 85 in the next 3-5 weeks.
Sameet Chavan, Chief Technical & Derivatives Analyst at Angel Broking
Prakash Industries | LTP: Rs 81.05 | Target price: Rs 94 | Stop loss: Rs 72.20 | Upside: 16%
This stock has been steadily moving higher since the March 2020 fiasco. However, it was unable to gain real momentum despite the broader market’s spectacular run all this while.
In the last couple of sessions, all of a sudden, stock prices started zooming up along with towering volumes, indicating tremendous buying interest in the stock.
The counter has managed to surpass the Rs 75-mark convincingly after nearly two years. Considering the broader degree of price action, this probably is the beginning of the multi-month rally in this counter.
We recommend going long on a small dip towards Rs 78 for a couple of short-term targets of Rs 88 and Rs 94.
Happiest Minds Technologies | LTP: Rs 612 | Target price: Rs 655 | Stop loss: Rs 542 | Upside: 7%
This relatively newer stock has not been doing anything for nearly five months after its listing on the bourses.
During the first half of February, the volumes started picking up rapidly and this was clearly getting reflected in the price movement as well.
Thereafter in merely eight sessions, the stock had a sharp rise of more than 70 percent to grab many traders and investors’ eyeballs.
This was followed by a brief phase of consolidation, which seems to be over now.
Last Thursday, stock prices finally managed to blow out, as we witnessed a colossal rally of more than 10 percent along with sizable volumes.
Although the historical price data is not much, the recent price chart displays a bullish flag breakout in this stock.
Sun Pharmaceutical Industries | LTP: Rs 610 | Target price: Rs 632 | Stop loss: Rs 596.50 | Upside: 4%
The entire pharma space has been quiet for nearly a couple of months now after seeing a phenomenal run during the high pandemic period.
The stock has been consolidating in a downward sloping channel with no major destruction in prices.
Now, after finding some support around the 89-EMA, stock prices are about to move higher. It is at the threshold of the higher trendline of the channel.
Looking at the positive placement of the momentum oscillators, as well as few key moving averages, the possibility of it confirming the breakout is quite high.
Brokerage: SMC Global Securities Ltd
Steel Authority of India Ltd: Buy| LTP: Rs 83.80| Target: Rs 94-97| Stop Loss: Rs 76| Upside 12%
The stock made a 52-week low at Rs 20.80 on 31 March 2020 and a 52-week high of Rs. 84.40 on 1 April 2021. The 200-days exponential moving average (DEMA) of the stock on the daily chart is currently at Rs 54.82.
As we can see on the charts, the stock is trading in higher highs and higher lows, which is bullish in nature.
Apart from this, the stock has formed an “Ascending Triangle” pattern on weekly charts, which is considered to be bullish. Last week, the stock has given the pattern breakout along with high volumes and also has managed to close above the same, so buying momentum may continue for the coming days.
Therefore, one can buy in the range of 82-83 levels for the upside target of 94-97 levels with a stop loss below 76.
Shriram Transport Finance Company: Buy| LTP: Rs 1472| Target: Rs 1560| Stop Loss: Rs 1390| Upside 6%
The stock made a 52-week low of Rs 490.29 on 7 April, 2020 and a 52-week high of Rs. 1534.95 on 15 February 2021. The 200 days exponential moving average of the stock on the daily chart is currently at Rs1061.04.
The short-term, medium-term, and long-term bias are looking positive for the stock as it is trading in higher highs and higher lows on charts and formed a `Cup and Handle' pattern, which is bullish in nature.
Last week, the stock has given the pattern breakout along with high volumes, so further buying is anticipated in the stock.
Therefore, one can buy in the range of Rs 1455-1460 levels for the upside target of 1560-1600 levels with a stop loss below Rs 1,390.
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.