Profit-taking in the last couple of sessions, especially since the RBI maintained status quo on repo rate, erased most of earlier gains of the week and, as a result, the Nifty50 ended the week with just 29 points gains at 18,563 on June 9.
The index has formed a small-bodied bearish candlestick pattern with long upper shadow on the weekly scale indicating selling pressure at higher levels, but the index continued to make higher-high formation for the 11th straight week, which is a positive sign.
Overall, the market remains bullish with resistance at 18,600-18,800 levels, though we have correction and consolidation at higher levels after the recent new swing high of the year, experts said.
Momentum indicators also showed positive bias with the RSI (relative strength index 14) at 62 levels indicating strength by sustaining above 50 and MACD (moving average convergence divergence) remaining above zero line with northward direction after giving a positive crossover on May 24.
"It’s been a lethargic period for our headline indices; but there is no shortage of real action in the broader end of the spectrum. Individual themes continue to unfold one after another and stocks are giving mesmerising moves in the meantime," Sameet Chavan, Head-Research, Technical and Derivatives at Angel One, said.
Ideally traders should focus on this and it’s better to stay light in index-specific trades till the time the range breakout happens in key indices, he said.
As far as levels are concerned, he feels 18,500 - 18,450 will be considered as a cluster pf supports, whereas on the other hand, 18,680 - 18,780 are expected to be seen as major hurdles.
Ashish Kyal, CMT, Author Founder / CEO at Waves Strategy Advisors believes Nifty50 can hit lifetime high levels in June but after a few days of consolidation and base formation.
On the downside, he feels 18,250 is an important support. "As long as this level is intact we will be optimistic for upside move to 18,880 – 18,900 levels," he said.
Broader markets have also taken a rest after run-up for more than a couple of weeks, but on a closing basis for the week, the Nifty Midcap 100 index gained half a percent and Smallcap 100 index rallied 1.2 percent.
Let's take a look at the top 10 trading ideas by experts for the next three-four weeks. Returns are based on the June 9 closing prices:
Expert: Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities
BHEL: Buy | LTP: Rs 85.80 | Stop-Loss: Rs 78 | Target: Rs 91.50 | Return: 7 percent
The stock is continuing to make higher highs within the tight trading range of Rs 78 and Rs 91.50. On Friday, the stock managed to close above last week's high and 5-day SMA (simple moving average).
Based on that, the stock can jump up to Rs 91.50 levels in the short term. However, trending activity may emerge on the rejection of Rs 91.50, which will lift the stock up to Rs 105. The strategy should be to buy at current levels and more on dips at Rs 82. For that, keep a stop-loss at Rs 78.
Shree Renuka Sugars: Buy | LTP: Rs 45.10 | Stop-Loss: Rs 41 | Target: Rs 54 | Return: 20 percent
On a daily and weekly basis, the stock is trading above the important level of Rs 44, indicating a trending activity in the near term. On a daily basis, on last Thursday, the stock managed to overcome the same and made a high of Rs 45.75, however, it failed later.
In the near term, we can expect a trending activity above Rs 45.75. It's a perfect example of a higher low is above a falling trend line. These types of formations allow the stock to move towards the previous hurdle, which was at Rs 54. Buy 50 percent at current levels and the rest at Rs 42.50, with a stop-loss at Rs 41.
Avenue Supermarts: Buy | LTP: Rs 3,632.10 | Stop-Loss: Rs 3,400 | Target: Rs 3,750-4,000 | Return: 10 percent
The stock has started forming a rounding bottom on the daily chart. It has spent 5 months above Rs 3,300 level, which eventually lifted the stock towards Rs 3,600.
Technically, it is a base-building formation, which could help the stock overcome the biggest hurdle, which is at Rs 3,750. Above Rs 3,750, it may be easy for the stock to reach Rs 4,000 level, which is the 50 percent retracement resistance for the stock.
Minor resistance exists at Rs 3,875. Buy 50 percent at the current level and the rest at Rs 3,500, with a stop-loss at Rs 3,400.
Expert: Subash Gangadharan, Senior Technical & Derivative Analyst at HDFC Securities
United Breweries: Buy | LTP: Rs 1,477.30 | Stop-Loss: Rs 1,428 | Target: Rs 1,550 | Return: 5 percent
After correcting from a high of Rs 1,806 tested in December 2022, United Breweries found support around Rs 1,353 levels in April 2023. These are strong supports as they also roughly coincide with previous intermediate lows.
The stock has since then been climbing higher and making higher bottoms in the process. This week, the stock also broke out of its recent trading range on the back of above average volumes, indicating it is set to move higher in the coming weeks.
Technical indicators are giving positive signals as the stock is trading above the 20 and 50-day SMA. Momentum readings like the 14-week RSI (relative strength index), too, are in rising mode and not overbought, which implies potential for further upsides.
With the intermediate technical setup, too, looking attractive, we expect the stock to move up towards its previous intermediate highs in the coming weeks. Buy between Rs 1,475-1,483 levels, with a stop-loss at Rs 1,428 and target of Rs 1,550.
Voltas: Sell | LTP: Rs 777.95 | Stop-Loss: Rs 805 | Target: Rs 745 | Return: 4 percent
Voltas is in a short term downtrend as it has been making lower tops and lower bottoms for the last several weeks. This week, the stock broke down from its recent trading range, indicating that the downtrend looks set to continue.
Technical indicators are giving negative signals as the stock is now trading below the 20 day and 50-day SMA. Momentum readings like the 14-week RSI too are in decline mode and not oversold, which implies potential for more downsides.
We therefore expect the stock to correct further in the coming sessions. Sell between Rs 776-780 levels, with a stop-loss at Rs 805 and target of Rs 745.
Exide Industries: Sell | LTP: Rs 205.7 | Stop-Loss: Rs 214 | Target: Rs 190 | Return: 8 percent
After rising sharply, Exide industries is finding resistance near its previous intermediate highs of Rs 219. Last week, the stock has broken down from its recent trading range and closed below the 20-day SMA.
The 14-day RSI too has fallen sharply, indicating a loss of momentum. We therefore believe the stock is headed lower in the coming sessions and recommend a sell between Rs 203-207 levels, with a stop-loss at Rs 214, and downside target at Rs 190.
Expert: Ruchit Jain, Lead Research at 5paisa.com
NTPC: Buy | LTP: Rs 182.8 | Stop-Loss: Rs 176 | Target: Rs 190-194 | Return: 6 percent
The stock rallied higher during the week gone by and gave a breakout from its long consolidation phase on the weekly charts. The volumes along with the breakout were much better than its average which is a positive sign.
The RSI oscillator also hints at positive momentum and hence, we expect a continuation of the uptrend in the short term.
Traders can buy this stock in the range of Rs 183-181 for potential short term targets of Rs 190 and Rs 194. The stop-loss for long positions should be placed below Rs 176.
Redington: Buy | LTP: Rs 185.4 | Stop-Loss: Rs 174 | Target: Rs 195-204 | Return: 10 percent
This stock showed a positive momentum at the start of this calendar month and has given a breakout from a channel. The volumes were decent compared to its daily average on breakout and the RSI is hinting at a positive momentum.
Hence, short term traders can look to buy the stock in the range of Rs 185-183 for potential targets of Rs 195 and Rs 204. The stop-loss for long positions should be placed below Rs 174.
Expert: Mitesh Karwa, Research Analyst at Bonanza Portfolio
AIA Engineering: Buy | LTP: Rs 3,223.20 | Stop-Loss: Rs 3,080 | Target: Rs 3,420 | Return: 6 percent
The stock has seen breaking out of an upward sloping parallel channel pattern on the monthly timeframe with a bullish candlestick after almost nine years and closing at new all-time high levels. The supertrend indicator is also indicating a bullish continuation trend which can be used as a confluence towards the bullish view.
On the indicator front, the Ichimoku Cloud is also suggesting a bullish move as the price is trading above the conversion line, base line and cloud. Momentum oscillator RSI (14) is at around 72 on the daily time frame indicating strength by sustaining above 50.
Observation of the above factors indicates that a bullish move in AIA Engineering is possible for targets upto Rs 3,420. One can initiate a buy trade in between the range of Rs 3,217-3,223, with a stop-loss of Rs 3,080 on daily closing basis.
Angel One: Buy | LTP: Rs 1,489.40 | Stop-Loss: Rs 1,300 | Target: Rs 1,800 | Return: 21 percent
Angel One has seen breaking out of a descending triangle pattern with above average volumes and a big bullish candlestick on the weekly timeframe and is also trading above important EMAs (exponential moving averages) of 20/50/100/200 which indicates strength.
On the indicator front, the supertrend indicator is indicating a bullish continuation, and momentum oscillator RSI (14) is at around 73 on the daily time frame indicating strength by sustaining above 50. The Ichimoku Cloud is also suggesting a bullish move as the price is trading above the conversion line, base line and cloud on the daily timeframe.
Observation of the above factors indicates that a bullish move in Angel One is possible for targets upto Rs 1,800. One can initiate a buy trade in the range of Rs 1,482-1,489, with a stop-loss of Rs 1,300 on daily closing basis.
Olectra Greentech: Buy | LTP: Rs 808.85 | Stop-Loss: Rs 730 | Target: Rs 920 | Return: 14 percent
Olectra Greentech has seen breaking out and sustaining above the breakout of a resistance zone on the weekly timeframe with a bullish candlestick. It is trading above all its important EMAs on the daily timeframe which indicates bullish strength.
The supertrend indicator is also indicating a bullish continuation which supports the bullish view. Momentum oscillator RSI (14) is at around 75 on the daily time frame indicating strength by sustaining above 50 and the Ichimoku cloud is also suggesting a bullish move as the price is trading above the conversion line, base line and cloud.
Observation of the above factors indicates that a bullish move in Olectra Greentech is possible for targets upto Rs 920. One can initiate a buy trade in between the range of Rs 800-808, with a stop-loss of Rs 730 on daily closing 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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