The market showed a nice recovery from its August lows and ended in the green for the first time in three weeks on October 6, with the formation of a dragonfly doji kind of candlestick pattern on the weekly charts. This bullish reversal stokes hopes for further rise in the Nifty50 and, if it comes true, then 19,800-20,000 can be a possibility in the coming days, with immediate support at 19,600-19,500 and crucial support at the 19,300 levels, experts said.
The Nifty50 gained 15 points to 19,654 in the truncated-yet-eventful week ended last Friday.
"Though the recent developments have been captivating as the Nifty formed a ‘dragonfly doji’ on the weekly charts, one should not become complacent as we are not entirely out of the woods," alerted Osho Krishan, senior analyst for technical and derivative research at Angel One.
He feels the 19,720-19,750 zone withholds the sturdy resistance, followed by the next cluster around 19,800-19,850 for the current week.
On the lower end, 19,580-19,500 is likely to be an immediate support zone. It would be important to defend the make-or-break level of 19,300 in order to avoid any kind of escalation this week, Krishnan said.
Arvinder Singh Nanda, senior vice-president at Master Capital Services, echoed Krishnan, saying the dragonfly doji pattern, which is typically considered a bullish signal, suggests that the short-term trend for the Nifty has turned positive. The chart pattern indicates that the benchmark index may face resistance at 19,800 this week, he feels.
Let's take a look at the top 10 trading ideas from experts for the next three-four weeks. Returns are based on the October 6 closing prices.
Expert: Viraj Vyas, CMT, Technical & Derivatives Analyst - Institutional Equity at Ashika Stock Broking
DLF: Buy | LTP: Rs 548.7 | Stop-Loss: Rs 522 | Target: Rs 615 | Return: 12 percent
The stock has been on a consistent uptrend, with occasional consolidation phases. It tends to break out of this zone quite convincingly. Friday was no exception, as the stock once again broke out of the short-term congestion zone, accompanied by strong volumes and price intensity, which indicate robust buying interest in the counter.
Given this breakout, the stock appears poised to move towards the Rs 600-610 levels in the upcoming sessions. However, it will be crucial for it to maintain its current pace and intent. Key support is expected at Rs 530 levels.
Bajaj Finance: Buy | LTP: Rs 8,169 | Stop-Loss: Rs 7,760 | Target: Rs 9,150 | Return: 12 percent
This stock stands out as one of the strongest non-banking financial company (NBFC) names in the market. It recently grabbed headlines because of fundraising activities and rallied on the RBI move to keep its policy rates unchanged.
What's particularly significant is the breakout this stock achieved on Friday. This breakout comes after a consolidation period of two years, both in terms of time and price. Such a breakout is typically seen as a bullish sign, indicating that the stock's upward momentum is likely to continue.
Equitas Small Finance Bank: Buy | LTP: Rs 94 | Stop-Loss: Rs 86 | Target: Rs 105 | Return: 12 percent
It has been a standout performer within the banking sector, showing its strength especially in 2023. However, it began to experience a correction from July.
The correction, however, didn't trigger a decline in price as the stock underwent a phase of time correction. This happens when a stock consolidates sideways, taking some time to build a base and establish support levels.
Equitas SFB found a solid support around Rs 85 and formed a 'double bottom’ pattern that it subsequently broke.
Expert: Nagaraj Shetti, technical research analyst at HDFC Securities
Easy Trip Planners: Buy | LTP: Rs 42.35 | Stop-Loss: Rs 39 | Target: Rs 46.50 | Return: 10 percent
After showing weakness in the previous week, the stock price has witnessed a sustainable upside bounce in the week ended October 6. The recent upside breakout of down trendline resistance has been validated again with the stock price rebounding from the weakness during the later part of last week.
The stock price is in an attempt to move above another resistance at Rs 43 levels. The volume has expanded during the upside breakout and weekly 14 period RSI (relative strength index) shows positive indication.
Buying can be initiated in Easy Trip at current market price (CMP Rs 42.35), add more on dips down to Rs 40.50, wait for the upside targets of Rs 46.50 and next Rs 52 in the next three-five weeks. Place a stop-loss of Rs 39.
EID Parry India: Buy | LTP: Rs 524.40 | Stop-Loss: Rs 485 | Target: Rs 575 | Return: 10 percent
The downward correction of the last few weeks seems to have completed last week, as the stock price has formed a doji type candle pattern as per weekly timeframe chart. The recent swing low of Rs 506 could be considered as a new higher bottom of the positive chart pattern.
After the upside breakout of weekly moving average resistances like 10 and 20 day EMA (exponential moving average) of Rs 490, the stock price has taken support of those moving average during its recent weakness. This is positive indication. Volume has expanded on Friday and the weekly 14 period RSI shows positive indication.
One may look to buy EID Parry at a CMP of Rs 524.40, add more on dips down to Rs 505 and wait for the upside targets of Rs 575 and next Rs 615 in the next three-five weeks. Place a stop-loss of Rs 485.
Expert: Shrikant Chouhan, head of research (retail) at Kotak Securities
Godrej Agrovet: Buy | LTP: Rs 515 | Stop-Loss: Rs 485 | Target: Rs 530-570 | Return: 11 percent
The stock has been forming a rectangular formation since July 2023, however, on Friday, it managed to close above the upper range, which stood at Rs 505.
It will face resistance at Rs 530 and Rs 570. On a daily basis, it also managed to close above all the important averages, which could minimise the downside for the stock. Buy at current levels and buy more on dips to Rs 505. For this keep a stop-loss at Rs 485.
HUDCO: Buy | LTP: Rs 92.15 | Stop-Loss: Rs 83 | Target: Rs 110-115 | Return: 19 percent
The stock is undergoing a gradual rounding bottom formation and may soon cross the level of Rs 102. It will be a notable event as the stock would achieve its highest level since 2017.
The upward trend of both the short-term and long-term moving averages may further add to its momentum. Buying at the present level of Rs 92, and also on dips to Rs 85, would be a prudent investment strategy.
To minimise losses, it is advisable to place a stop-loss at Rs 83. If the stock successfully crosses Rs 102 levels, it may continuously rise and reach levels of Rs 110 and Rs 115.
Thomas Cook: Buy | LTP: Rs 123 | Stop-Loss: Rs 100 | Target: Rs 145-160 | Return: 18 percent
It appears that the stock is forming a cup-with-a-handle structure, which indicates that it's integrating rapidly. Moreover, the tourism sector is putting up a strong performance, thanks to its solid fundamentals, which could help the stock find support at each key level.
If the stock falls below Rs 123, it will find support at Rs 110 and Rs 100. On the other hand, if it rises above Rs 123, it may encounter resistance at Rs 135, which is the highest point the stock has ever reached.
If it goes above Rs 135, it could reach Rs 145 and Rs 160 in the medium term. It's advisable to buy the stock between Rs 123 and Rs 110, and set the stop-loss at Rs 100.
Expert: Mitesh Karwa, research analyst at Bonanza Portfolio
L&T Finance Holdings: Buy | LTP: Rs 137.55 | Stop-Loss: Rs 127 | Target: Rs 156 | Return: 13 percent
L&T Finance Holdings has seen breaking out of a bullish pattern on the weekly timeframe after almost three years with a big, bullish candlestick and above average volumes, adding to it the stock is trading and sustaining above all its important EMAs 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 64 on the daily time frame indicating strength by sustaining above 50.
Observation of the above factors indicates that a bullish move in L&T Finance is possible for target upto Rs 156. One can initiate a buy trade in between the range of Rs 135-137, with a stop-loss of Rs 127 on daily closing basis.
Punjab Chemicals & Crop Protection: Buy | LTP: Rs 1,217 | Stop-Loss: Rs 1,100 | Target: Rs 1,400 | Return: 15 percent
Punjab Chemicals has seen breaking out of a downwards sloping parallel channel pattern on the weekly timeframe with a bullish candlestick and above average volume after almost two years which indicates strength. The stock is also trading above all its important EMAs on the daily timeframe which acts as a confluence.
The Supertrend indicator is also indicating a bullish continuation which supports the bullish view. Momentum oscillator RSI (14) is at around 64 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 Punjab Chemicals is possible for target upto Rs 1,400. One can initiate a buy trade in between the range of Rs 1,210-1,217, with a stop-loss of Rs 1,100 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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