Bulls kept their reign over Dalal Street for the third straight week, lifting the market to fresh historic highs on July 14. The Nifty50 closed above the 19,500 mark for the first time, especially after breaking the eight-day consolidation range of 19,300-19,500 points.
The index jumped 1.2 percent to 19,565 and formed a long bullish candlestick pattern on the weekly charts, with making higher highs formation for 16th consecutive week.
Further, the index has seen a breakout of upward sloping resistance trendline adjoining highs of December last year and previous week, with the momentum indicator RSI (relative strength index) showing bullish crossover on all timeframes.
Technically, the Nifty seems to be looking strong now. Hence, 19,600-19,700 is expected to be key resistance area initially for the Nifty50, followed by 19,800-19,900 levels, with immediate support at 19,500, and then at 19,400-19,300 levels, experts said.
"The bulls are being resilient to let loose their grip even in the overbought parameters which showcase their dominance. But at the same time, one should not become complacent and overrule the possibility of a breather post the steep rally," Osho Krishan, Senior Analyst for Technical and Derivative Research at Angel One, said.
As far as levels are concerned, he feels 19,400-19,300 is likely to cushion any short-term blip, while the sacrosanct support lies around the bullish gap of 19,200 in the comparable period.
On the flip side, as the index entered uncharted territory there is no relevant hurdle; however, the next pitstop could be seen around 19,650-19,700 on an immediate basis, he said.
He expects strong moves in the broader markets amid the quarterly earnings, so one needs to have a stock-centric approach for better trading opportunities and also stay abreast with global and domestic developments.
Option data clearly indicated that 20,000 can be a possibility for the Nifty in coming weeks, but in near term, 19,600-19,700 can act as a resistance area, while the 19,500-19,300 is expected to be support area.
Prashanth Tapse, Senior VP (Research) at Mehta Equities feels the bulls are likely to remain in control. "There is room for further upside, and we anticipate the Nifty to reach fresh all-time highs around the 20,000 mark in the near term," he said.
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 14 closing prices:
Expert: Nandish Shah, senior derivative and technical analyst at HDFC Securities
Orient Cement: Buy | LTP: Rs 143.6 | Stop-Loss: Rs 130 | Target: Rs 156 | Return: 9 percent
The stock price has broken out on the weekly chart from the downward sloping trendline, adjoining the weekly highs of February 11, 2022 and June 9, 2023. Primary trend of the stock is positive as stock price is trading above its 200-day EMA.
Momentum oscillators like - RSI (relative strength index 11) and MFI (money flow index 10) are sloping upwards and placed above 60 on the daily chart, indicating strength in the current uptrend of the stock.
Indian Bank: Buy | LTP: Rs 324.35 | Stop-Loss: Rs 305 | Targets: Rs 345-360 | Return: 11 percent
The stock price has been forming bullish higher top higher bottom formation on the weekly chart. Primary trend of the stock is positive as stock price is trading above its important long term moving averages.
PSU banks as a sector is showing strength on the short-term chart. RSI oscillator (11) is sloping upwards and placed above 60 on the daily chart, indicating strength in the stock.
Biocon: Buy | LTP: Rs 262.20 | Stop-Loss: Rs 250 | Target: Rs 278-290 | Return: 11 percent
The stock price has broken out on the daily chart to close at highest level since July 4, 2023. Primary trend of the stock turned positive as stock price closed above its 200-day EMA.
Pharma stocks are placed well on the short and medium term chart. Momentum Oscillators - RSI (11) is sloping upwards and placed above 60 on the daily chart, indicating strength in the current uptrend of the stock.
Expert: Shrikant Chouhan, head of equity research (retail) at Kotak Securities
LTIMindtree: Buy | LTP: Rs 5,093 | Stop-Loss: Rs 4,800 | Targets: Rs 5,350-5,600 | Return: 10 percent
The stock has been forming an ascending triangle consolidation for the past year. In the past two weeks, the stock has completed a break out as well as a throwback pattern, which may help traders spot the trending activity in the near term.
On a weekly basis, it has formed a Hammer pattern, which is again a bullish reversal signal. The strategy should be to buy at Rs 5,100 and Rs 4,900. For this, keep a stop-loss at Rs 4,800.
On the upside, it would face resistance at Rs 5,350 and Rs 5,600, which traders can consider targets for riding long positions.
JSW Steel: Buy | LTP: Rs 804.85 | Stop-Loss: Rs 780 | Targets: Rs 860-900 | Return: 12 percent
Since the last two months, the stock has been consolidating and developing a diamond consolidation formation on the weekly/monthly charts. It would constitute a bullish continuation as it crossed Rs 790 last week.
Based on the technical formation, the stock may start moving towards Rs 1,000 level in the coming few months. From a short to medium-term perspective, the strategy should be to buy at Rs 810 and Rs 790, for targets of Rs 860 and Rs 900, with stop-loss at Rs 780.
NTPC: Buy | LTP: Rs 187.45 | Stop-Loss: Rs 183 | Targets: Rs 195-210 | Return: 12 percent
The stock's primary and intermediate trend is bullish, however, it is correcting from higher highs in the near term due to more retracements. However, in the past week, it corrected back to the 50 percent retracement of the previous bull move, which was between Rs 171 and Rs 198.
Since the major trend is positive, contra traders may consider entering long positions. It would be a fair reward-to-risk ratio. Buy NTPC between Rs 188 and Rs 185. Put stop-loss at Rs 183. On the higher side, it could move towards Rs 195, Rs 198 and Rs 210.
Expert: Ruchit Jain, lead research at 5paisa.com
Escorts Kubota: Buy | LTP: Rs 2,376.75 | Stop-Loss: Rs 2,317 | Targets: Rs 2,450-2,480 | Return: 4 percent
The stock has been forming a ‘Higher Top Higher Bottom’ structure and is thus in an uptrend. The prices have now given a breakout above the previous high and the RSI oscillator has been indicating a positive momentum.
Traders can look to buy the stock in the range of Rs 2,380-2,370 for potential targets around Rs 2,450 and Rs 2,480. The stop-loss for long positions should be placed below Rs 2,317.
National Aluminium Company: Buy | LTP: Rs 89.3 | Stop-Loss: Rs 85 | Targets: Rs 93-97 | Return: 9 percent
The Dollar Index has witnessed a sharp down move in last few days and metals usually have an inverse co-relation with the DXY. This stock has given a breakout from the resistance with high volumes and the RSI oscillator is hinting a positive momentum.
Traders can look to buy the stock around current price of Rs 89 and look to add on dips towards Rs 87. The stop-loss should be placed below Rs 85 for potential targets of Rs 93 and Rs 97.
Expert: Mitesh Karwa, research analyst at Bonanza Portfolio
Tech Mahindra: Buy | LTP: Rs 1,228.65 | Stop-Loss: Rs 1,150 | Target: Rs 1,350 | Return: 10 percent
Tech Mahindra has seen breaking out of a consolidation pattern on the weekly timeframe with a bullish candlestick and closing above the highs of last thirteen months with above average volumes which indicates strength.
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 Tech Mahindra is possible for target upto Rs 1,350 in 3-4 weeks. One can initiate a buy trade in the range of Rs 1,120-1,126, with a stop-loss of Rs 1,150 on daily closing basis.
Container Corporation of India: Buy | LTP: Rs 688.80 | Stop-Loss: Rs 655 | Target: Rs 740 | Return: 7.4 percent
Container Corporation has seen breaking out of the line of polarity on the weekly timeframe with a bullish candlestick and closing above all its important EMAs which indicates bullish strength.
On the indicator front, the momentum oscillator RSI (14) is at around 61 showing strength by sustaining above 50. The supertrend indicator is also indicating a bullish reversal which supports the bullish view and the Ichimoku Cloud is also suggesting a bullish move as the price is trading above the conversion line and base line.
Observation of the above factors indicates that a bullish move in Container Corporation is possible for a target upto Rs 740. One can initiate a buy trade in between the range of Rs 685-688, with a stop-loss of Rs 655 on daily closing basis.
National Aluminium Company: Buy | LTP: Rs 89.3 | Stop-Loss: Rs 85 | Targets: Rs 99 | Return: 11 percent
The stock has seen breaking out of an upwards sloping wedge on the weekly timeframe and closing above the highs of last one year with a big bullish candlestick and above average volumes and sustaining above all its important EMA’s which indicates bullish strength.
On the indicator front, the supertrend indicator is indicating a bullish reversal 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 71 on the daily time frame indicating strength by sustaining above 50.
Observation of the above factors indicates that a bullish move in NALCO is possible for a target upto Rs 99 in 3-4 weeks. One can initiate a buy trade in between the range of Rs 89-89.4, with a stop-loss of Rs 85 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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