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Podcast | Stock picks of the day: Remain long, Nifty likely to head towards 11,450-11,550 levels

Traders should continue to remain on the long side as we expect the Nifty to head towards 11,450-11,550 levels

September 23, 2019 / 09:38 AM IST
 
 
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For the entire last week the market looked depressed and the way it was grinding towards recent lows, traders and investors were almost losing all hope. The Finance Minister tried a lot many things in the last few weeks to boost sentiment; but seems she had saved her masterstroke for the right time.

On September 20, the Finance Minister delivered and that has clearly been proven by such a mesmerizing reaction from the market. Buying commenced the moment the FM initiated her speech and it went to a different level for the next couple of hours. Finally, this became the historical day for our markets as we clocked the biggest ever intraday gain to take a giant leap from 10,700 levels.

One has to understand that the low hanging fruit is already gone after this colossal rally. But this is not the end of it; there are further legs to unfold from hereon. For Nifty Midcap index, September was the 21st month from January 2018 peak. In the last couple of occasions (historically), the downtrend got arrested in the 21st and 34th month.

As per the Fibonacci series, both 21 and 34 are part of it and hence hold some significance. For the Nifty, last week was the 21st week as per ‘time retracement’ and thus, we were hoping for some respite. Considering this week’s correction, our final hope was the recent low of 10,637.

Close

Fortunately, it remained defended and with September 20 developments, the market seemed to have validated our ‘time retracement’ hypothesis. Now, we have finally managed to thrash the recent sturdy wall of 11,200 with some authority.

Traders should continue to remain on the long side as we expect the Nifty to head towards 11,450-11,550 levels.

As far as supports are concerned, 11,150 followed by 11,000 would now be seen as a sheet anchor. Any decline (if any) should be construed as a buying opportunity. Almost all sectors (especially the beaten down) soared as if there is no tomorrow. One needs to identify apt candidates which are likely to extend this lead. The Finance Minister has finally delivered and market has finally turned cheerful.

Here are top two stocks that could return 11-13 percent in the next few days:

VIP Industries: Buy | LTP: Rs 459.30 | Stop loss: Rs 429.40 | Target: Rs 510 | Upside: 11%

On the daily chart, the stock price have started moving in a ‘Higher Top Higher Bottom’ formation a bullish price cycle. In addition, we are witnessing a bullish reversal pattern breakout known as ‘Cup N Handle’. Moreover, prices have closed above 200 DMA which was previously acting as stiff resistance and now indicates a change in polarity.

Momentum oscillator i.e. RSI has just crossed in the overbought territory but going with the strong positive momentum we sense a further strong leg of up move in the near term.

We recommend buying this counter for target of Rs 510 over the next few days. The stop loss should be fixed at Rs 429.40.

Deepak Nitrite: Buy | LTP: Rs 286.55 | Stop loss: Rs 267 | Target: Rs 325 | Upside: 13%

After trading in a narrow range for the last few weeks, the stock has given ‘Descending Triangle’ bullish breakout on the daily chart. The said breakout is supported with a bullish candle and increasing volume.

Momentum oscillator i.e. RSI as well has given a fresh buy crossover with its smoothed moving average and has entered the positive zone. In addition, prices have closed above 50DEMA and 100DEMA which indicates short to medium term bullishness.

Going with all the above evidences, we recommend buying this stock at current level for a target of Rs 325 over the next few days. The stop loss can be placed at Rs 267.

The author is Chief Analyst- Technical & Derivatives at 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.
Moneycontrol Contributor
first published: Sep 23, 2019 08:40 am

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