The market, despite Friday's correction, ended the last week on a positive note and continued upward rally for second consecutive week on July 7. The Nifty50 hit a fresh record high before getting into correction on Friday and settled tad above 19,300, down 0.85 percent, whereas for the week, it rallied 0.74 percent.
The index has formed bullish candlestick pattern with long upper shadow on the weekly charts, indicating selling pressure or failure to sustain at record high levels, but the higher highs formation continued for 15th consecutive week, which is a positive sign.
After the breakout of horizontal as well as upward sloping resistance trendlines in previous week ending June 30, the index sustained uptrend in following week, which is a positive sign. Overall, the index is likely to continue its march upwards amid consolidation with hurdle at 19,500-19,600 levels, whereas the near term support is expected to be 19,300-19,200 levels, followed by crucial support at 19,000, experts said.
"We believe the bull run is likely to continue, marking the start of a major upward movement. However, the momentum on the upside may not match the intensity of the past couple of weeks. Considering the overbought conditions, we may witness a period of consolidation in the coming week, during which dips could be seen as buying opportunities," Sameet Chavan, head research, technical and derivatives at Angel One said.
On the other hand, he advised to take secure profits at higher levels and avoid complacency until the indicators exit the overbought territory.
In terms of support levels, the immediate support lies around 19,200, where a bullish gap was left last week, while the major breakout levels around 19,000-18,900 serve as a strong foundation for the market, Sameet said.
As the prices are currently in uncharted territory, it is challenging to identify resistance zones, however, the range of 19,500-19,600 appears to be an immediate hurdle for the anticipated consolidation, he believes.
Ajit Mishra, SVP - Technical Research at Religare Broking also sees consolidation, saying after the recent vertical up move in Nifty from 18,600 to 19,500 in no time, it is prudent for the index to spend some time around the current levels before marching further northwards.
He expects Nifty to respect the 18,700-19,000 zone in case of any dip, while the 19,500-19,700 zone may act as a hurdle.
Let's take a look at the top 10 trading ideas by experts for the next three-four weeks. Returns are based on the July 7 closing prices:
Expert: Nagaraj Shetti, technical research analyst at HDFC Securities
Granules India: Buy | LTP: Rs 311.9 | Stop-Loss: Rs 289 | Targets: Rs 340-375 | Return: 20 percent
The attached weekly timeframe chart of Granules India indicates sustainable upside bounce in the last couple of weeks. The stock price is currently in an attempt of upside breakout of the hurdle at Rs 310 levels, which is neckline of double bottom formation. Hence, a sustainable upmove from here could bring sharp upside momentum for the stock price.
We observe larger degree of higher bottom formation and the anticipated upmove could open renewed buying towards new higher top formation. Volume has started to expand during an attempt of upside breakout and weekly 14 period RSI (relative strength index) shows positive indication. The overall chart pattern of Granules indicates long trading opportunity.
Buying can be initiated in Granules at CMP (Rs 311.9), add more on dips down to Rs 300, wait for the upside target of Rs 340 and next Rs 375 in 1 month, with a stop-loss of Rs 289.
UPL: Sell | LTP: Rs 663 | Stop-Loss: Rs 702 | Target: Rs 615 | Return: 7 percent
After showing narrow range movement in the last two months, the stock price has slipped into weakness from the highs and closed at the lower range of Rs 660 levels as per weekly chart.
Weekly negative chart pattern like lower tops and bottoms is intact and the stock price is currently placed at the edge of downside breakout of the crucial support like ascending trend line at Rs 660 levels. Volume has started to expand on Friday during weakness in the stock price and the weekly 14 period RSI shows negative indication.
One may look to sell UPL Ltd at CMP (Rs 663), add more on rise up to Rs 685 and wait for the downside target of Rs 615 in the next 1 month. Place a stop-loss of Rs 702.
Expert: Shrikant Chouhan, head of equity research (retail) at Kotak Securities
LIC Housing Finance: Buy | LTP: Rs 390 | Stop-Loss: Rs 369 | Targets: Rs 430-450 | Return: 15 percent
After a strong rally, currently the stock is witnessing rangebound activity. However, the medium term texture of the stock is still in to the positive side. Technically, on weekly charts, the stock has formed higher bottom formation and comfortably trading above 200 and 50-day SMA (simple moving average) which is largely positive.
Unless it is trading below Rs 369, positional traders retain an optimistic stance and look for a target Rs 430-450. Fresh buying can be considered now and on dips, if any between Rs 390 and Rs 380 levels, with a stop-loss below Rs 369.
Tata Steel: Buy | LTP: Rs 111.6 | Stop-Loss: Rs 106 | Targets: Rs 125-130 | Return: 16.5 percent
After a quick short-term correction, the stock took the support near 200-day SMA and reversed. Post reversal, the stock is comfortably trading above 200-day SMA that is largely positive. In addition, on weekly charts the stock has formed promising reversal formation and the texture of the chart suggesting strong possibility of fresh uptrend rally from the current levels.
We are of the view that, as long as the stock is trading above Rs 106 the bullish formation is likely to continue. Above the same, it could move up till Rs 125-130.
For the positional traders, the strategy would be to buy in two parts, at Rs 112 and at Rs 109. Keep a stop-loss at Rs 106 for the target of Rs 125 and Rs 130.
Tech Mahindra: Buy | LTP: Rs 1,156 | Stop-Loss: Rs 1,100 | Targets: Rs 1,250-1,275 | Return: 10 percent
After a short-term correction, the stock took the support near 200-day SMA and bounced back sharply. Post reversal the stock rallied over 10 percent. In the last week, it registered a fresh 52-week high of Rs 1,184.95.
Currently, the stock is comfortably trading above short term and medium term averages which supports further uptrend from the current levels. Technically, higher bottom formation on daily and weekly charts indicating uptrend wave is likely to continue in the near future.
For Traders, the strategy would be to buy in two parts, at Rs 1,156 and a tRs 1,120. Keep a stop-loss at Rs 1,100 for targets of Rs 1,250 and Rs 1,275.
Expert: Mitesh Karwa, research analyst at Bonanza Portfolio
Granules India: Buy | LTP: Rs 311.9 | Stop-Loss: Rs 280 | Target: Rs 360 | Return: 15.4 percent
The stock has seen taking support from an upward sloping support trendline on the weekly timeframe and closing with a bullish candlestick above all its important EMA’s (exponential moving average) which indicates bullish strength.
On the indicator front, the Supertrend indicator is indicating a bullish continuation trend; 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 70 on the daily time frame indicating strength by sustaining above 50.
Observation of the above factors indicates that a bullish move in Granules is possible for target upto Rs 360 in 3-4 weeks. One can initiate a buy trade in between the range of Rs 309-311, with a stop-loss of Rs 280 on daily closing basis.
Jamna Auto Industries: Buy | LTP: Rs 112 | Stop-Loss: Rs 100 | Target: Rs 130 | Return: 16 percent
Jamna Auto has seen breaking out of a downwards sloping trendline on the weekly timeframe after retesting a rounding bottom formation breakout on the monthly timeframe which indicates strength as the script has closed with a bullish candlestick and above average volumes.
On the indicator front, the momentum oscillator RSI (14) is at around 73 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 on the daily timeframe.
Observation of the above factors indicates that a bullish move in Jamna Auto is possible for targets upto Rs 130. One can initiate a buy trade in the range of Rs 110-112, with a stop-loss of Rs 100 on daily closing basis.
Fortis Healthcare: Buy | LTP: Rs 325.8 | Stop-Loss: Rs 299 | Target: Rs 370 | Return: 13.6 percent
Fortis has seen breaking out of an upwards sloping parallel channel pattern on the monthly timeframe and on the weekly timeframe, the stock has seen breaking out of a resistance zone and closing above its all-time high which indicates bullish strength.
On the indicator front, the momentum oscillator RSI (14) is at around 76 showing strength by sustaining above 50. The Supertrend indicator is also indicating a bullish continuation which supports the bullish view 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 Fortis is possible for target upto Rs 370. One can initiate a buy trade in between the range of Rs 323-325, with a stop-loss of Rs 299 on daily closing basis.
Expert: Ruchit Jain, lead research at 5paisa.com
Bombay Burmah Trading Corporation: Buy | LTP: 1,113 | Stop-Loss: Rs 1,030 | Targets: Rs 1,190-1,250 | Return: 12 percent
Post the recent corrective phase, prices have started forming a ‘higher top, higher bottom’ structure on the daily chart. In this recent move, the price upmoves have been supported by higher volumes while the corrections did not see much high volumes which is a positive sign.
The RSI oscillator is hinting at a positive momentum and hence, short term traders should look for buying opportunities.
Traders can look to buy the stock in the range of Rs 1,110-1,100 for potential targets around Rs 1,190 and Rs 1,250. The stop-loss for long positions should be placed below Rs 1,030.
Rashtriya Chemicals and Fertilisers: Buy | LTP: Rs 116.35 | Stop-Loss: Rs 109 | Targets: 124-128 | Return: 10 percent
The stock recently witnessed a consolidation within a broad range and prices have given a breakout above the resistance. The breakout has been supported by higher volumes. The RSI oscillator is also hinting at a positive momentum.
Traders can buy this stock in the range of Rs 116-113 for potential near term targets of Rs 124 and Rs 128. The stop-loss on long positions should be placed below Rs 109.
Expert: Sameet Chavan, head research, technical and derivatives at Angel One
Orient Electric: Buy | LTP: Rs 252.30 | Stop-Loss: Rs 242.4 | Target: Rs 270 | Return: 7 percent
This stock has seen a decent rebound from the lows of Rs 220 odd zone in the current financial year and has recouped nearly 15 percent. In the recent period, the counter has witnessed strong price-volume traction, which led to a consolidation breakout.
On the weekly time chart, we can see ‘1-2-3’ pattern getting confirmed, which may unfold the next leg of the rally. Also, the primary technical indicators align with the ongoing momentum, which adds up to the bullish quotient in the counter.
Hence, we recommend buying this stock for a trading target of Rs 270. The stop-loss can be placed at Rs 242.40.
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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