After taking a breather, the market regained momentum and scaled a record high in the week ended November 25 on the back of positive global cues. Buying binge by foreign investors and a fall in crude oil also aided the rally.
The Nifty50 closed above 18,500 for the first time in history, rising more than a percent during the week and formed bullish engulfing pattern on the daily charts, indicating positive mood at Dalal Street. The index is now around 100 points away from its record high of 18,604 seen on October 19 last year, while the BSE Sensex and Bank Nifty crossed their previous record high levels.
On the weekly charts, there was a breakout of downward sloping resistance trend line adjoining October 18, 2021 and November 14, 2022. Even on a monthly scale, the index has seen a breakout of downward sloping resistance trend line adjoining October 1, 2021, and September 1, 2022. Also the index has been trading well above all key exponential moving averages.
Hence, 18,450-18,500 is expected to be a crucial area for further upside. If the said zone sustains, then new highs are possible in the coming days, with support at 18,300, followed by 18,000 levels, experts said, adding on the option side, 19,000 strike has attracted a lot of open interest, indicating the crucial resistance point.
"I think 18,600 and 18,750 are the next levels to watch out for, above which the path towards next milestone of 19,000 unfolds. The ‘buy on decline’ strategy continues to pay rich dividend to market participants and hence, there is no harm on continuing the same," Sameet Chavan, Chief Analyst-Technical and Derivatives at Angel One, said.
The immediate support zone is now visible in the vicinity of 18,400 – 18,300, whereas the actual base now shifts higher towards 18,100. As long as the Nifty manages to defend this territory, there is no reason to worry for, Sameet feels.
The market expert advised traders to continue with an optimistic approach. Now, with other sectors chipping in, he expects a good broad-based buying in the current week.
Let's take a look at the top 10 trading ideas by experts for the next three-four weeks. Returns are based on the November 25 closing prices:
Expert: Shrikant Chouhan, Head of Equities Research (Retail) at Kotak Securities
GMR Infrastructure: Buy | LTP: Rs 40.7 | Stop-Loss: Rs 38 | Target: Rs 48 | Return: 18 percent
The stock is forming a rounding bottom formation on the daily chart. It has formed a higher bottom on the weekly chart. Based on the comprehensive technical structure, it has more legs to move forward.
The stock may rally towards Rs 48-49, which was the high of the recent decline. Buy at current levels of Rs 40-41 and keep a stop-loss at Rs 38 for the same.
GAIL India: Buy | LTP: Rs 93.25 | Stop-Loss: Rs 89 | Target: Rs 105 | Return: 13 percent
It is diverging positively and formed a falling wedge at the end of the recent downtrend. The above formation is bullish and will take the stock toward Rs 100 or Rs 105 in the near term.
Traders should become buyers at current levels for a target of Rs 100-105 and keep a stop-loss at Rs 89 for this.
BHEL: Buy | LTP: Rs 81.95 | Stop-Loss: Rs 74 | Target: Rs 100 | Return: 22 percent
The stock has surpassed a swing high at Rs 80.50 and closed above the same on a weekly basis. On a quarterly basis, after the year 2007, the first time it has formed a series of the higher bottom, which is an indication of a major reversal pattern.
It has the potential to move Rs 100 or Rs 110 in the next few weeks. The strategy should be at buy between Rs 83 and Rs 82. One can keep a final stop-loss at Rs 74 for a trading long position. Hurdles will be at Rs 87, Rs 93 and at Rs 100.
Expert: Nandish Shah, Senior Derivative & Technical Analyst at HDFC Securities
MSTC: Buy | LTP: Rs 282 | Stop-Loss: Rs 265 | Target: Rs 302-320 | Return: 13 percent
The stock price has broken out from the downward sloping trendline on the weekly chart, adjoining the highs of week ending October 22, 2021 and April 22, 2022 with higher volumes.
Primary trend of the stock turned positive as stock price closed above its 100 and 200 days EMA (exponential moving average).
PSU stocks have been doing well and are looking good for the short to medium term. One can buy the stock in the range of Rs 282-275.
Rallis India: Buy | LTP: Rs 239 | Stop-Loss: Rs 226 | Target: Rs 255-268 | Return: 12 percent
The stock price has broken out from the symmetrical triangle on the daily chart with higher volumes. Primary trend of the stock is positive as it is trading above its 50, 100 and 200-day EMA.
Momentum Oscillators like RSI (relative strength index - 11) and MFI (money flow index - 10) are in rising mode and placed above 60, indicating strength in the current uptrend. One can buy the stock in the range of Rs 239-234.
Den Networks: Buy | LTP: Rs 35.25 | Stop-Loss: Rs 33 | Target: Rs 38-41 | Return: 16 percent
The stock price has broken out on the daily line chart with higher volumes to close at highest level since November 14. Short term trend of the stock turned positive as stock price has closed above its 5 and 20-day EMA.
Accumulation was seen in the stock in the month of November where volumes are higher on up days as compared to down days.
Momentum oscillators like RSI (11) witnessed trendline breakout, indicating higher possibility of price to gain momentum from hereon. One can buy the stock in the range of Rs 35.25-34.
Expert: Jatin Gohil, Technical and Derivative Research Analyst at Reliance Securities
InterGlobe Aviation: Buy | LTP: Rs 1,907 | Stop-Loss: Rs 1,790 | Target: Rs 2,080 | Return: 9 percent
After a trendline breakout, the stock respected that extended trendline and resumed its up-move. Its daily RSI gave strong buy signal after oscillating around its bull market support zone (40-33).
This could lead the stock towards Rs 2,020 initially and Rs 2,080 subsequently.
On the lower side, the stock will continue to find support around its extended trendline, while in case of high volatility, its cluster of moving averages will restrict the fall and it will support a reversal.
Gujarat Narmada Valley Fertilizers & Chemicals: Buy | LTP: Rs 607.2 | Stop-Loss: Rs 534 | Target: Rs 720 | Return: 19 percent
The stock reversed after testing its prior point of polarity and breached its prior weekly falling trend. In the past, the stock witnessed a sharp up-move after testing that point.
We believe history will repeat itself, as the stock has engulfed loss of previous week and its key technical indicators are positively poised on short-term timeframe chart.
The stock has potential to move towards its highest level of October 2022. In case of any decline, the stock will respect that prior point of polarity.
Persistent Systems: Buy | LTP: Rs 3,970.8 | Stop-Loss: Rs 3,590 | Target: Rs 4,950 | Return: 25 percent
In mid-October 2022, the stock surpassed its 20-week as well as 50-week EMAs (exponential moving average) and after a consolidation extended gain subsequently. Above these moving averages are on the verge of a bullish cross-over.
A follow-up move will confirm the bullish cross-over and strengthened the stock to move towards its life-time-high level.
On the lower side, the stock will find support around its 20-week and 50-week EMAs.
Expert: Ruchit Jain, Lead Research at 5paisa.com
Tech Mahindra: Buy | LTP: Rs 1,080 | Stop-Loss: Rs 1,030 | Target: Rs 1,160 | Return: 7 percent
The IT space has witnessed good momentum in last few weeks post the recent pullback move from the lows in Nasdaq. Amongst the index heavyweights, stocks such as Infosys, HCL Technologies and TCS have posted good returns in this phase and now Tech Mahindra is close to a breakout from its consolidation phase.
In the last few weeks, this stock has consolidated within a narrow range and has formed a 'Symmetrical Triangle' pattern. Prices are on the verge of the breakout which could lead to a good trended move on the upside in the near term.
Hence, we advise short term traders to buy Tech Mahindra around current market price of Rs 1,077 for potential targets around Rs 1,127 and Rs 1,160. The stop-loss for long positions should be placed below Rs 1,030.
L&T Finance Holdings: Buy | LTP: Rs 86.90 | Stop-Loss: Rs 82.50 | Target: Rs 94 | Return: 8 percent
The stock has seen consolidated within a broad range in last few months and prices have given a breakout from a falling trendline resistance in Friday's session. The volumes on breakout were higher as compared to its daily average which is a positive sign.
The RSI oscillator has given a positive crossover on the daily as well as the weekly charts and is thus indicating a positive momentum.
Hence, traders can look to buy the stock around current market price of Rs 86.50 for potential targets around Rs 91 and Rs 94. The stop-loss for long positions should be placed below Rs 82.50.
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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