There were just three sessions during the week for the domestic markets but that too were dominated by the bulls. The Nifty spot index maintained its road to recovery and recaptured the 17,600 mark. The sentiment remained positive in the absence of any negative triggers and, as a result, the Nifty ended the week with gains of around 1.5 percent.
At this juncture, in line with our view for bounce, Nifty has reached 17,600 mark. However, we reiterate our view that the zone of 17,600 – 17,800 would be a tough nut to crack since we have a gap area near 17,500 – 17,600, which is now filled and the upper end of the falling channel is near the 17,700 mark. We off late had a bullish view for the bounce but our broader view still remained the same and that is the markets won't have a unidirectional move in the first half of 2023.
Traders are advised to book their longs in index near the mentioned zone. In fact, we might be looking forward to sell signal in Nifty around 17,800. We expect individual stock action in this zone and traders should focus on that. With regards to supports; 17,500 – 17,200 seems to be a strong zone.
Bank Nifty
Nifty Bank rallied 1 percent during the week and this has buoyed the index to close above the 41,000 mark. Similar to Nifty; the road ahead for Nifty Bank might not be that easy since it too has a gap area and falling channel resistance at higher levels.
This zone is of 41,000 – 41,500 and above that there is a strong supply zone. We expect consolidation at higher levels and individual stock participation. On the downside; immediate support is at 40,600 and then 40,000.
Here are three buy calls for next 2-3 weeks:
FSN E-Commerce Ventures (Nykaa): Buy | LTP: Rs 131 | Stop-Loss: Rs 115 | Target: Rs 150 | Return: 14 percent
After registering the top of Rs 429 on November 26, 2021 the said counter has been making lower top lower bottom structures which resulted in a 71 percent cut in price. At the current juncture, it has made a clear Bullish Bat pattern near Rs 125-126 levels which is looking lucrative buy.
Also, it is accompanied by an impulsive structure on the daily scale of RSI (relative strength index) near oversold levels of 30 thus complimenting the bullish stance in the counter in near terms.
One can buy in small tranche around Rs 128-132 and another around Rs 122-124 with upside target at Rs 150 and stop-loss at Rs 115.
Sobha: Buy | LTP: Rs 450 | Stop-Loss: Rs 425 | Target: Rs 500 | Return: 11 percent
On September 9, 2022, it made a top of Rs 751, since then it has been making the lower top and lower bottom structure which resulted in a massive 44 percent cut in price. At the current juncture, it has a bullish Butterfly pattern near Rs 400-410 levels which is looking lucrative.
On the daily scale, MACD (moving average convergence divergence) looks overstretched thus hinting towards a bounce back from a potential reversal zone of Rs 410-420.
Thus, one can buy in small tranches in the range of Rs 450-452 and another around Rs 440-444 with an upside target of Rs 500 and a stop-loss of Rs 425 on a daily close basis.
Welspun India: Buy | LTP: Rs 73 | Stop-Loss: Rs 66 | Target: Rs 86 | Return: 17 percent
Since the last 3 trading sessions, the said counter has witnessed massive buying interest. Moreover, on a daily scale, it has formed a Bullish Bat around Rs 65-67 levels.
Even moreover interesting thing to watch is the bullish regular divergence on a daily scale of the RSI exactly near our reversal zone of Rs 65-66. Having said that there is a trendline break in daily RSI and price action (refer to the chart).
One can buy in the range of Rs 71-73 with an upside target of Rs 86 and stop-loss would be Rs 66 on a daily close basis.
Disclaimer: The views and investment tips expressed by investment 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.
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