Bears retained their dominance on Dalal Street for the fourth consecutive week ended March 4. The intensifying war between Ukraine and Russia, and climbing oil prices to a decade high spooked markets during the week. Weak third-quarter GDP numbers and February auto sales data also weighed on the sentiment.
The Nifty50 fell 2.5 percent or 413 points to 16,245 during the week, the lowest closing level since August 6. The index has formed a bearish candle on the weekly scale and, considering the current war situation, the index falling below 16,000 amid current elevated volatility can be possible in the short term before getting bottomed out, but in case that happens then that would be great buying opportunity, experts feel.
"Although such war scenarios are always tricky, we can clearly see a negative trend on the weekly time-frame charts," said Sameet Chavan, Chief Analyst-Technical and Derivatives at Angel One.
In addition, the falling slope of RSI-smoothened oscillator is an indication of further weakness. So, though the Nifty has reached the initial target of 16,200, we do not want to pre-empt a near-term bottom here, he says, adding 16,000–15,900 is to be seen as an immediate support, while on the higher side, 16,450, followed by 16,600, will be strong resistances.
"Looking at the war situation, we will not be surprised to see the Nifty enter sub-16,000 terrain, but we do not expect the index to slip below 15,500–15,200, as of now," Chavan said.
From an investor's point of view, he feels this is certainly an excellent opportunity to bag quality stocks in a staggered manner but for traders, it will be difficult to say that worse is behind.
Here are the top 10 trading ideas by experts for the next 3-4 weeks. Returns are based on March 4 closing prices.
Expert: Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities
Hindalco Industries: Buy | LTP: 583.80 | Stop-Loss: Rs 550 | Target: Rs 660 | Return: 13 percent
The stock had spent a lot of time below the Rs 550 level. On the decisive break of Rs 550, the stock is set to move towards Rs 660 in the near future.
On Friday, the stock corrected at Rs 580 after hitting a high of Rs 619. As the trend is strong, we need to buy on each of the major support with a stop-loss at Rs 550.
Jindal Steel and Power: Buy | LTP: 435.75 | Stop-Loss: Rs 420 | Target: Rs 470-500 | Return: 15 percent
The stock is forming a double bottom formation. Our view is that the stock is moving towards a low of Rs 470. It is available at Rs 435, which is the major support for the stock and if Rs 475 is decisively crossed then we can also see Rs 500 levels which was its previous level high.
In short, the stock is gaining momentum and the strategy should be to add long positions at each of the major support. To keep the long position safe, we need to place a tight stop-loss at Rs 420.
ACC: Sell | LTP: Rs 2,010.55 | Stop-Loss: Rs 2,050 | Target: Rs 1,900-1,850 | Return: 8 percent
The stock has broken the key Rs 2,000 support, above which it has spent more than 9 months. This is a decisive breakdown.
The stock is trending lower according to the Directional Moving Index Oscillator (DMI), suggesting that we should have a seller at each resistance. The broad formation of the stock is between Rs 2,000 and Rs 1,975. Place a stop-loss at Rs 2,050.
Expert: Astha Jain, Senior Research Analyst at Hem Securities
Birlasoft: Buy | LTP: Rs 437.95 | Stop-Loss: Rs 380 | Target: Rs 485-510 | Return: 16 percent
After making high of Rs 585 on January 10, 2022, the stock has fallen and touched the level of Rs 380 on February 24, 2022. Afterwards, the stock is continuously forming higher highs & higher lows in last few trading sessions & has successfully close above 10 & 20 EMA (exponential moving average).
Also, on daily charts, MACD (moving average convergence divergence) crosses above its signal line which qualifies bullish trend in stock while on weekly charts, a bullish Engulfing pattern is formed. Hence, we believe that stock is poised for upside rally with medium term target of Rs 510.
Tips Industries: Buy | LTP: Rs 2,090.60 | Stop-Loss: Rs 1,800 | Target: Rs 2,450-2,610 | Return: 25 percent
On daily chart, MACD crosses above its signal line which qualifies bullish trend in stock while on weekly chart, stock has formed strong base at around Rs 1,800 level.
Any sustainable close above Rs 2,270 will bring further strength in stock and lead the price movement upwards towards Rs 2,450-2,600 level. Hence, we believe that stock is medium term buy opportunity with possible price targets of Rs 2,450-2,610.
Expert: Vinay Rajani, Senior Technical & Derivative Analyst at HDFC Securities
Wipro: Buy | LTP: Rs 575.30 | Stop-Loss: Rs 555 | Target: Rs 610 | Return: 6 percent
The stock has surpassed the crucial resistance of its 20-day EMA. There has been series of positive divergences registered on the daily RSI oscillator, which shows the accumulation in the stock.
Other indicators like daily MACD has also been trading above its equilibrium line. IT sector has been showing strength in the current scenario and depreciating rupee against dollar could also help the sector to outperform.
Larsen & Toubro: Sell | LTP: Rs 1,711.75 | Stop-Loss: Rs 1,765 | Target: Rs 1,625 | Return: 5 percent
The stock has been forming lower tops and lower bottoms on the daily charts. Stock has breached crucial support of its 200-day EMA. Indicators and oscillators like RSI, MACD and DMI (directional movement index) have turned bearish on the short term charts.
Indicators and oscillators have been indicating bearish trend for the medium term. Stock price has broken down below 5-day of consolidation along with rising volumes.
Shriram Transport Finance: Sell | LTP: Rs 1,089.15 | Stop-Loss: Rs 1,125 | Target: Rs 1,010 | Return: 7 percent
After a big bearish candle on February 24, 2022, the stock went in to consolidation phase for next four trading sessions.
Considering the primary trend, stock is on the verge of breaking below the recent swing low, which will result in to breakdown from the consolidation. Stock has been trading below is important moving averages.
Expert: Ruchit Jain, Lead Research at 5paisa.com
Bajaj Finance: Sell | LTP: Rs 6,537.90 | Stop-Loss: Rs 6,725 | Target: Rs 6,300 | Return: 4 percent
Recently, the stock has consolidated in a range above its '200-DMA. However, towards the end of the week the prices gave a breakdown below the support with a gap down. The 'RSI' oscillator is indicating a weak momentum while the short term moving average is below the medium term indicating a short term downtrend. We expect further correction in the stock in the short term and hence, short term traders should look to sell the stock on any pullback move.
Hence, short term traders can look for shorting opportunities in the range of Rs 6,570-6,590 with a stop-loss placed above Rs 6,725 for potential short term targets of Rs 6,300. (The given levels are of cash segment which can be used as reference to trade in futures segment)
ITC: Buy | LTP: Rs 225.50 | Stop-Loss: Rs 210 | Target: Rs 242-250 | Return: 11 percent
While the stock did not participate in the recent market uptrend, it is now witnessing buying interest in such an uncertain environment due to its low volatility. The prices up move during the week have been supported by rising volumes while the momentum oscillators are indicating positive traction. Prices have given a breakout above its 'Bollinger Bands’ which are rising now and hence, we expect a positive trend in the stock in the near term.
Hence, traders can look to trade with a positive bias and buy the stock in the range of Rs 225-220 for potential targets of Rs 242 and Rs 250 in the near term. One can place a stop-loss below Rs 210 on long positions.
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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