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Sensex, Nifty at historic highs | Experts suggest top 10 trading ideas for next 3-4 weeks

Following the rally over the past one month, experts suggest that investors book timely profits and avoid aggressive buying. According to them, the next resistance on the Nifty 50 is expected at 18,000, with support at 17,600.

September 27, 2021 / 10:11 AM IST
 
 
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The bulls are roaring, helping the benchmark indices to hit historic highs and maintain the uptrend for the fifth consecutive week as of September 24.

The BSE Sensex decisively surpassed the 60,000 mark and the Nifty 50 drew closer to 18,000. However, a similar momentum was absent in the broader markets, as the BSE MidCap Index gained 0.59 percent and the SmallCap Index rose 0.06 percent.

Both the benchmark indices closed at a record. The BSE Sensex jumped 1,032.58 points, or 1.75 percent, to 60,048.47 during the week and the Nifty 50 climbed 268.05 points, or 1.52 percent, to 17,853.20.

Given the significant rally over the past one month, experts suggest that investors book timely profits and avoid aggressive buying. According to them, the next resistance on the Nifty 50 is expected at 18,000, with support at 17,600.

“Our markets had a remarkable comeback in the last four sessions as we not only managed to recover from lows but also went on to clock fresh highs,” said Sameet Chavan, chief analyst – technical and derivatives, at Angel Broking. “We have clearly outperformed global peers because despite a relief move in last two days, they are still trading well below their highs.”

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He said the recovery beyond 17,600 was certainly surprising but the market was superior.

“Ideally, after the market surpassed previous highs, our cautious stance should have been negated, but there are a few time-wise projections as well as negative divergence in the Relative Strength Index (RSI)-smoothened oscillator, clearly holding us back,” he said.

As far as levels are concerned, every 100 points from here can be seen as an immediate resistance, i.e., 17,900-18,000. On the flipside, 17,700-17,650 are to be seen as key supports, Chavan said.

He advised traders to continue with a stock-specific approach but keep booking timely profits and avoid carrying aggressive overnight bets. Meanwhile, all eyes are on the global markets and on how the banking index, which could probably decide the next path of action for the markets, he said.

Here are 10 trading ideas by experts for the next 3-4 weeks. Returns are based on September 24 closing prices:
Sameet Chavan, chief analyst - technical and derivatives at Angel Broking

Blue Star: Buy | CMP: Rs 897.85 | Stop Loss: Rs 853 | Target: Rs 960 | Return: 6.9 percent

TThis stock had been consolidating for five to six months without any real momentum. However, the price suddenly took off after surpassing its sturdy wall of Rs 890. This move was accompanied with sizable volumes, providing credence to the move.

Pricewise, the daily chart now exhibits a bullish cup and handle pattern and we expect a decent move in this stock in the forthcoming week.

We recommend buying on a decline towards Rs 890-880 for a short-term target of Rs 960. The stop-loss can be placed at Rs 853.

ONGC: Buy | CMP: Rs 136.10 | Stop Loss: Rs 129.80 | Target: Rs 149 | Return: 9.5 percent

This Maharatna company failed to live up to expectations for the past seven years. Even in the ongoing bull run, it did not participate much. But now, with crude oil prices trading at a three-year high, ONGC is showing some strength.

Last week, ONGC shares surpassed the key 200-day simple moving average on the weekly timeframe chart for the first time since May 2019. In addition, the average directional index (14) indicator has started displaying an upward trajectory. One can look to buy this stock for a near-term target of Rs 149. The stop-loss can be placed at Rs 129.80.
Nagaraj Shetti, technical research analyst at HDFC Securities

National Fertilizers: Buy | CMP: Rs 59.85 | Stop Loss: Rs 55 | Target: Rs 67 | Return: 11.9 percent

After moving in a narrow high-low range for the past few weeks as per the weekly timeframe chart, the fertilizer stock showed an upside breakout at Rs 58.50 on September 24. The larger degree higher tops and bottoms are intact and the present upward move could be in line with the expected new higher top formation.

The stock price is currently placed above the hurdle of the 10- and 20-week exponential moving average at about Rs 59. Hence, a sustainable move above this area could open a sharp upside momentum in the stock price. Buying can be initiated in NFL at Rs 60, add more on dips to Rs 57, wait for the upside target of Rs 67 in the next three to four weeks, and place a stop-loss of Rs 55.

The Phoenix Mills: Buy | CMP: Rs 945.50 | Stop Loss: Rs 880 | Target: Rs 1,060 | Return: 12.1 percent

This realty stock witnessed a sharp upside breakout of the larger consolidation pattern on the weekly timeframe chart at Rs 900 and closed higher. The formation of consistent higher bottoms, as per the weekly timeframe chart, signals the intact medium-term uptrend in the price. Volumes expanded during the upside breakout and the weekly 14 period RSI shows positive indication.

One may look to buy The Phoenix Mills at the current market price, add more on dips to Rs 910 and wait for the target of Rs 1,060 in the next three to four weeks. Place a stop-loss of Rs 880.

Shrikant Chouhan, head of equity research (retail) at Kotak Securities

Mahindra & Mahindra: Buy | CMP: 779.45 | Stop Loss: Rs 750 | Target: Rs 850 | Return: 9.1 percent

The auto index made a strong comeback in the previous week after hitting the 200-day SMA support level. M&M made an exceptional recovery after hitting the lower boundary of the current trading range of Rs 740-Rs 850.

Technically, it seems the stock has formed a higher bottom at Rs 740 and is heading for the upward boundary, which is at Rs 850, with major resistance at Rs 790, where it has the hurdle of the 200-day SMA. Buy at current levels and add more on dips with a final stop-loss at Rs 750.

LIC Housing Finance: Buy | CMP: Rs 429.25 | Stop Loss: Rs 420 | Target: Rs 470 | Return: 9.5 percent

LIC Housing has decisively crossed the swing high at Rs 429 with a rise in volumes. After two months, the stock closed above the 200-day SMA, which is positive for the medium term. Reality stocks are rallying and that would help housing finance companies in the near term.

Sun Pharma: Buy | CMP: Rs 770.45 | Stop Loss: Rs 730 | Target: Rs 870 | Return: 12.9 percent

Technically, the stock is forming a symmetrical triangle. It has a bullish consolidation after rallying to Rs 804 from Rs 650. It is the biggest outperforming stock in the pharma basket and should be bought at current levels and more on dips to about Rs 750.

Protect long positions with a final stop loss at Rs 730. On the higher side, Rs 800 and Rs 830 would be major hurdles.

Ashis Biswas, head of technical research at CapitalVia Global Research

HDFC Bank: Buy | CMP: Rs 1,601.55 | Stop Loss: Rs 1,520 | Target: Rs 1,720 | Return: 7.4 percent

The stock has been following an uptrend. We have observed a major breakout above Rs 1,600. Indicators like the MACD (moving average convergence/divergence) and RSI suggest the momentum in the stock is likely to continue. We recommend a buy in HDFC Bank above Rs 1,605 with a target of Rs 1,720. Investors are advised to maintain a stop-loss of Rs 1,520.

HPCL: Buy | CMP: Rs 274.80 | Stop Loss: Rs 244 | Target: Rs 300 | Return: 9.2 percent

HPCL has formed an inverse head and shoulders pattern. We expect a bullish movement in the stock from the support and the momentum to continue. It has taken support at the 200 DMA line. We recommend a buy above Rs 276 with a target of Rs 300 and a stop-loss of Rs 244 for a medium-term perspective.

JB Chemicals & Pharmaceuticals: Buy | CMP: Rs 1,835.80 | Target: Rs 2,050 | Return: 11.7 percent

The stock has reversed from near the support of the 100 DMA. We have observed a breakout from the cup and handle formation above Rs 1,800. We recommend a buy above Rs 1,840 with a target of Rs 2,050 and a stop-loss of Rs 1,695 for a medium-term perspective.

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.
Sunil Shankar Matkar

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