The market closed with a 1 percent loss in the week ended July 15 in the face of negative returns in four straight sessions followed by bounced back in Friday's trade with a Hammer kind of pattern formation on the daily charts, which generally indicates trend reversal. Even on the weekly scale, there was Inside body Hammer kind of pattern formation.
The index settled at 16,049, down 171 points during the week. If the index sustains above psychological 16,000 mark, then it can march towards 16,275, the near term top hit on July 8, with 15,927 as a crucial support, experts said.
Oscillators like RSI (relative strength index) and Stochastic on the daily charts on Friday also indicated that the sentiments are positive.
"Technically, on the weekly charts, the Nifty has formed an Inside Body Hammer kind of formation which indicates indecisiveness between the bulls and bears. For the bulls, the 50-day SMA (simple moving average - 16,027) and 16,000 would act as a trend decider level," Amol Athawale, Deputy Vice President - Technical Research at Kotak Securities, said.
He feels a strong possibility of a fresh uptrend rally is likely, if the index trades above 16,000-16,050, which is a short-term resistance zone. Above the same, the index could rally till 16,200-16,300, he said, adding on the flip side, "a close below 50-day SMA or 15,850 could trigger a fresh round of selling. Below which the index could slip till 15700-15650”.
Nagaraj Shetti, Technical Research Analyst at HDFC Securities believes the short-term trend in the Nifty seems to have reversed on the upside after showing a gradual weakness in the last five sessions.
"The formation of positive chart pattern at the key support signals more upside for the market ahead. The next upside levels to be watched would be 16,250. Immediate support is placed at 15,925," Shetti said.
The cooling down volatility also provided strong support to bulls and if it falls further or stays below 18 mark then there could be more stability in the market, experts said. India VIX, the fear index, fell by 4.35 percent for the week at 17.60 levels.
Here are the top 10 trading ideas by experts for the next three-four weeks. Returns are based on the July 15 closing prices:
Jatin Gohil- Technical & Derivative Analyst at Reliance Securities
ABB India: Buy | LTP: Rs 2,559.45 | Stop-Loss: 2,430 | Target: Rs 2,900 | Return: 13.3 percent
On July 6, the stock witnessed a breakout from Cup and Handle pattern and extended gain subsequently. The key technical indicators are in favour of the bulls on medium-term as well as short-term timeframe charts.
The stock has potential to keep exploring uncharted territory. This could lead the stock towards Rs 2,750 initially and Rs 2,925 subsequently, which coincides with its targets based on cup and handle’s depth.
Fresh long position can be initiated at current juncture and on dips towards Rs 2,500 for the desired action.
In case of any decline, as per the change in polarity principle, the stock will find support around its neckline, which is placed at around Rs 2,430.
Navin Fluorine International: Buy | LTP: Rs 3,780.15 | Stop-Loss: Rs 3,555 | Target: Rs 4,170 | Return: 10 percent
The stock respected its intermediate rising trendline, as it bounced after testing that line and breached its prior daily falling trend. The stock formed a Bullish Engulfing pattern on the daily chart, where volume was above average.
Its daily RSI (relative strength index) reversed after testing its threshold line (placed at 50-mark) and witnessed a bullish cross-over. As per the current set-up, undergoing positive momentum will continue.
On the higher side, the stock may face hurdle around its prior high connecting falling trendline. A stable move above that trendline could take the stock towards its triple top formation zone, which is placed between Rs 4,170 and Rs 4,190.
Titan Company: Buy | LTP: Rs 2,189.70 | Stop Loss: Rs 1,930 | Target: Rs 2,600 | Return: 19 percent
After a higher level of reversal (i.e. 34 percent fall from its peak level), the stock respected its 100-week SMA (simple moving average), as it bounced after testing that moving average. Since early-August 2020, the stock remained above its 100-week SMA and may remain above it. Its weekly RSI reversed from the bull market support zone (40-33) and gave a buy signal.
As per the change in polarity principle, the stock may face hurdle around its lower band of the horizontal channel, which is placed at around Rs 2,300. A stable move above that band will be positive for the stock, which could take it towards Rs 2,600, where its upper band is placed.
Fresh long position can be initiated at current juncture and on dips towards Rs 2,140 for a probable up-move.
Vinay Rajani, CMT, Senior Technical & Derivative Analyst at HDFC Securities
Finolex Cables: Buy | LTP: Rs 407.90 | Stop-Loss: Rs 390 | Targets: Rs 430-460 | Return: 5-13 percent
The stock has been consolidating in the narrow range with low volumes in last four trading sessions. However, positional trend of the stock is bullish, as price surpassed the crucial resistance of previous swing high placed at Rs 409 and has been sustaining above it.
The stock is placed above its 20 and 50 days EMA (exponential moving average), which indicates bullish trend for the short term.
Indicators and oscillators have been showing strength in the current uptrend. The stock can be bought in two tranches one at CMP and second at Rs 395, for the targets of Rs 430 and Rs 460, while keeping a stop-loss at Rs 390.
Talbros Automotive Components: Buy | LTP: Rs 492.30 | Stop-Loss: Rs 465 | Targets: Rs 540-570 | Return: 10-16 percent
The stock price broke out from the downward sloping channel on its weekly chart. After breakout, the stock showed throwback towards the previous breakout level. This recent running correction is opportunity to create fresh long position in the stock, as it touched support level.
Auto and Auto ancillary sectors have been outperforming and the same is expected to continue in the short term. The stock can be bought in two tranches one at current market price (CMP) and second at Rs 470, for the targets of Rs 540 and Rs 570, while keeping a stop-loss at Rs 465.
Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities
Apollo Hospitals Enterprises: Buy | LTP: Rs 3,931.70 | Stop-Loss: Rs 3,850 | Target: Rs 4,300 | Return: 9 percent
On the daily chart, it is turning positive. It is forming an ascending triangle at the bottom of the recent selloff, indicating a bullish consolidation.
It also is on the verge of crossing the trading range at Rs 4,000. Since the stock is supporting a bullish pattern, we should be buyers at the current levels. Place a stop-loss at Rs 3,850 for a target of Rs 4,300.
Cipla: Buy | LTP: Rs 966 | Stop-Loss: Rs 925 | Target: Rs 1,000-1,100 | Return: 3.5-14 percent
Since March 2022, the stock was in a corrective pattern, however, on Friday, it managed to close above the supply line level. It is a bullish breakout pattern and targets at least Rs 1,000 and Rs 1,100 levels in the best-case scenario.
Buy at current levels and place a final stop-loss at Rs 925.
Trent: Buy | LTP: Rs 1,210.70 | Stop-Loss: Rs 1,150 | Target: Rs 1,346 | Return: 11 percent
Having touched the Rs 1,000 level, it is in an impulse wave. Over the past 7 days, the stock has spent time between the rectangle consolidation of Rs 1,150 and Rs 1,220.
The stock is moving towards Rs 1,250 level on the higher side as per the wave pattern. In a best-case scenario, the stock could move to the level of Rs 1,346, the previous all-time high. Place a final stop-loss at Rs 1,150 for the same.
Ruchit Jain, Lead Research at 5paisa
Bharat Electronics: Buy | LTP: Rs 245.50 | Stop-Loss: Rs 230 | Targets: Rs 260-272 | Return: 9-11 percent
The prices have recently consolidated within a range which seems to be a time-wise correction within an uptrend. The consolidation has led to formation of a ‘Symmetrical Triangle’ pattern on the daily chart and prices have given a breakout from the pattern.
This indicates a resumption of its broader uptrend and as the oscillators are also hinting at a positive momentum, we expect continuation of the uptrend in the near term.
Hence, traders can look to buy the stock in the range of Rs 245-242 for potential targets of Rs 260 and Rs 272 in the near term. The stop-loss should be placed below Rs 230.
PI Industries: Buy | LTP: Rs 2953.25 | Stop-Loss: Rs 2,800 | Target: Rs 3,100-3,225 | Return: 5-9 percent
Along with the broader markets, the stock had seen a correction from the month of October 2021. Post a price wise correction, the stock has formed a support base around Rs 2,400 and now the prices have resumed the ‘Higher Top Higher Bottom’ structure.
The stock has also given a breakout from the falling trendline resistance and the ‘RSI Smoothed’ oscillator is hinting at a positive momentum.
Thus, traders can look to buy the stock in the range of Rs 2,950-2,940 for potential targets of Rs 3,100 and Rs 3,225 in the near term. The stop-loss can be placed below Rs 2,800.
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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