It was a historic week for the Indian equities as the Nifty50 scaled 18,300 and the BSE Sensex climbed above 61,000 mark for the first time and also held these levels at close on October 14, backed by auto, banking and financial, energy and infra stocks.
The Nifty50 gained 2.5 percent during the last week and formed a bullish candle on the weekly charts. The index also saw a bullish candle formation on the daily scale as it gained 1 percent on Thursday. Despite being a truncated week, bulls remained in a strong position throughout the week, indicating that the uptrend may continue and the broader index could move up to 18,500 but being in an uncharted territory, moderate profit-booking or consolidation can't be ruled out, according to experts.
"Now since we are trading in an uncharted territory, it would be very difficult to project higher levels. Hence, 18,500 is to be seen as an immediate psychological level and thereafter every 100 points round figure is to be considered as next level," said Sameet Chavan, Chief Analyst-Technical and Derivatives, at Angel One.
He said that 18,200 followed by 18,000 should be seen as strong support for the coming days. "Here, 18,000 holds a key for the bulls and as long as it's defended comfortably, the bulls have no reason to worry about. Although the trend has been extremely strong, we reiterate that one should avoid getting complacent at such elevated levels," Chavan said.
Pragmatic approach would be to go one step at a time and try to avoid aggressive bets overnight. "The stock-specific action continues and hence, traders are advised to keep focusing on such bets," he advised.
Here are 10 technical 'buy' calls for the next 3-4 weeks:
Expert: Subash Gangadharan, Senior Technical and Derivative Analyst at HDFC Securities
Adani Ports: Buy | LTP: Rs 812.80 | Stop Loss: Rs 750 | Target: Rs 960 | Return: 18.1 percent
Adani Ports is in a healthy intermediate uptrend as it has been consistently making higher tops and higher bottoms for the last several months. Recently, the stock has corrected from a high of Rs 901 and found support near the Rs 638 levels. The 200-day SMA (simple moving average) has also been providing support to the stock while it has bounced back.
Over the last few weeks, the stock was consolidating in a tight range of Rs 721-786 before breaking out on Thursday on the back of above average volumes.
The facts that stock is trading above the key moving averages like the 20 and 50-day SMA, the intermediate technical setup seeming positive, and momentum readings like the 14-day RSI (relative strength index) are in the rising mode and not extremely overbought, augur well for the uptrend to continue.
We, therefore, recommend a 'buy' between Rs 800 and Rs 817. Stop loss is at Rs 750, while target is at Rs 960.
Lakshmi Machine Works: Buy | LTP: Rs 9,032.80 | Stop Loss: Rs 8,500 | Target: Rs 10,600 | Return: 17.4 percent
Laxmi Machine Works has been rising over the last several weeks and making higher tops and higher bottoms in the process. On Thursday, the stock broke out of the Rs 7,364-8,550 trading range on the back of above-average volumes. This paves way for the rally to sustain.
With the stock trading above the key moving averages like the 20 and 50-day SMA and the 14-day RSI in rising mode and not overbought, the technical indicators are supporting more upsides.
With the intermediate technical setup too looking positive, we recommend a 'buy' in the Rs 9,000-9,200 levels. Stop loss is at Rs 8,500, while target is at Rs 10,600.
Redington India: Buy | LTP: Rs 153.25 | Stop Loss: Rs 144 | Target: Rs 177 | Return: 15.5 percent
Redington has been consolidating in a range of Rs 136-153 for the last few weeks. On Thursday, it broke out of this range on the back of above-average volumes.
Technical indicators are giving positive signals as the stock trades above the 20 day and 50-day SMA. Momentum readings like the 14-day RSI are in the rising mode and not overbought, which implies potential for further upsides.
We, therefore, expect the stock to move up further and test its previous intermediate highs in the coming sessions. Buy between Rs 151, and Rs 155. Stop loss is at Rs 144, while target is at Rs 177.
Expert: Shrikant Chouhan, Head - Equity Research (Retail) at Kotak Securities
SBI Card: Buy | LTP: Rs 1,134.95 | Stop Loss: Rs 1,080 | Target: Rs 1,300 | Return: 14.5 percent
Since March 2021, the stock has been forming an ascending triangle on the daily chart. The broad formation and stock trend is positive, suggesting a bullish consolidation.
Based on the weekly chart, the stock is on the way to cross the upper barrier at the level of Rs 1,150. Once that is dismissed, we can see the Rs 1,350-1,400 level in the next few weeks. Buy at current levels and more with a stop loss at Rs 1,050.
Coal India: Buy | LTP: Rs 183.80 | Stop Loss: Rs 170 | Target: Rs 220 | Return: 19.7 percent
It is in a strong uptrend, however, the stock has been in a corrective pattern for the last seven days and should end the correction between the Rs 180 and Rs 178 levels.
Once the completion of the corrective pattern, we expect the stock to move to the Rs 210-220 level. At current prices, the risk-reward ratio is favourable.
Bajaj Finance: Buy | LTP: Rs 7,862.90 | Stop Loss: Rs 7,740 | Target: Rs 8,250 | Return: 4.9 percent
The stock reversed from a high of Rs 8,000-8,010. However, volume-based activity is missing, indicating that sellers are not confident and eventually, the stock should cross the big barrier of Rs 8,000-8,020.
On a weekly basis, the stock is crossing the crowded area, which is between Rs 7,300 and Rs 8,000 levels. It is worth buying at the current level. Keep the stop loss at Rs 7,740 level.
Expert: Vidnyan Sawant, AVP - Technical Research at GEPL Capital
ITC: Buy | LTP: Rs 256.55 | Stop Loss: Rs 230 | Target: Rs 310 | Return: 21 percent
ITC has given a triangle pattern breakout on the weekly charts with volume confirmation a few weeks ago that shows a strong bullish undertone for the stock in the medium to long term.
Looking at the price action, momentum indicators and other technical parameters, we believe this stock has a lot of upside potential left.
Going ahead, we expect the bullish momentum to accelerate if the price goes above the previous swing high of Rs 310. If this level is breached, we might see the stock move towards Rs 322 followed by Rs 367.
The stop loss for this trade setup would be Rs 230 levels on closing basis.
Tata Consumer Products: Buy | LTP: Rs 849.60 | Stop Loss: Rs 796 | Target: Rs 960 | Return: 13 percent
The stock had entered a corrective phase after hitting a lifetime high of Rs 889 and moved lower towards Rs 796, which coincides with the 20-week simple moving average and 23.6 percent retracement level of Rs 458 to Rs 889. For the past three weeks, the prices have been finding support near the same, and bounced back sharply.
If this level holds, we might see prices gain momentum and move higher toward the recent lifetime highs of Rs 889 and eventually towards Rs 960 (38.2 percent extension level of Rs 458 – Rs 889 projected from Rs 796).
Investors can accumulate Tata Consumer at this point and hold with a target of Rs 889 and Rs 960, and maintain a stop loss of Rs 796 on closing basis.
Federal Bank: Buy | LTP: Rs 93.10 | Stop Loss: Rs 85 | Target: Rs 110 | Return: 18 percent
Federal Bank has given a triangle pattern breakout with volume confirmation this week on the weekly charts which indicates strong positive sentiment for the medium to long term.
The momentum and technical indicators all point to the possibility of the prices moving higher towards the Rs 98.55 mark immediately. If the level is breached, we might see the prices move towards the Rs 110 level eventually.
The stop loss for this trade setup would be Rs 85 levels on closing basis.
Expert: Sameet Chavan, Chief Analyst-Technical and Derivatives at Angel One
HBL Power Systems: Buy | LTP: Rs 54.70 | Stop Loss: Rs 49.80 | Target: Rs 61 | Return: 11.5 percent
This small ticket size counter has been consolidating since last four months now. However, all this while it never lost its positive posture. On Thursday, we finally witnessed a huge breakout from this congestion zone.
If we look at the volume activity, we can see sizable volumes to support this price action. In addition, the 'RSI-Smoothened' oscillator on the daily chart has surpassed the 70 mark, which may provide impetus for the next leg of the rally.
We recommend buying in a range of Rs 54 – 53.50 for a short-term target of Rs 61. The stop loss can be placed at Rs 49.80.
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