After a week of consolidation, the market flexed muscles and made more than a percent gains in the week ended May 12, with the Nifty50 forming a bullish candlestick pattern on the weekly charts after the formation of a shooting star kind of pattern in the previous week.
The index has also continued with higher tops formation for the seventh consecutive week and closed with 246 points gains at 18,315, the highest closing level since last December.
Even the momentum indicators RSI (relative strength index 14) showed bullish bias and MACD (moving average convergence divergence) giving a positive crossover above zero line on the weekly scale. Hence, the momentum can take the Nifty50 towards 18,500-18,700 in coming sessions, if it sustains 18,200 mark which can be near term support, followed by 18,000 being crucial support, experts said.
"The sustenance of Nifty at the higher band of the consolidation zone for most of the trading sessions indicates inherent strength. As far as levels are concerned, 18,200 is likely to cushion any short-term blip, while the sacrosanct support lies around the 18,100-18,000 zone in the comparable period," Sameet Chavan, Head Research, Technical and Derivatives at Angel One said.
On the flip side, he feels 18,500 is very much in the vicinity and with ongoing momentum, it is strongly anticipated to get tested soon. At the same time, an authoritative breach beyond the same could trigger the next leg of rally in the upcoming weeks, he says.
Going ahead, he remains sanguine with the current momentum and would advocate the traders to utilize the dips to add long positions in the index.
Mitesh Karwa, Research Analyst at Bonanza Portfolio also feels the coming week is of extreme importance as it will decide the trend for the next leg. "18,200 levels are expected to act as a strong support zone and if held in the forthcoming week, Nifty will start moving towards 18,500 levels."
"Highest open interest is at 18,300 on the Call side and 18,200 on the Put side and hence, till the time Nifty is in this range, it is expected to remain sideways," Karwa 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 May 12 closing prices:
Expert: Subash Gangadharan, Senior Technical & Derivative Analyst at HDFC Securities
Hubtown: Buy | LTP: Rs 45.1 | Stop-Loss: Rs 40 | Target: Rs 55 | Return: 22 percent
Hubtown has shown relative strength last week. While the Nifty has gained 1.34 percent last week, Hubtown has gained a healthy 12.8 percent. In the process, the stock has closed above its recent trading range on the back of above average volumes, which augurs well for the uptrend to continue.
Technical indicators are giving positive signals as the stock is trading above the 20 and 50-day SMA (simple moving average). Momentum readings like the 14-week RSI too are in rising mode and not overbought, which implies potential for further upsides.
With the intermediate technical setup too looking attractive, we expect the stock to move up towards its previous intermediate highs in the coming weeks. Buy between Rs 44-46 levels, with a stop-loss at Rs 40 and target of Rs 55.
LT Foods: Buy | LTP: Rs 113.5 | Stop-Loss: Rs 108 | Target: Rs 126 | Return: 11 percent
After correcting from a high of Rs 122 tested in January 2023, Daawat found support around Rs 90 levels in March 2023. These are strong supports as they also roughly coincide with previous intermediate lows.
The stock has since then been climbing higher and making higher bottoms in the process. Last week, the stock also broke out of its recent trading range on the back of above average volumes, indicating it is set to move higher in the coming weeks.
Technical indicators are giving positive signals as the stock is trading above the 20 and -day SMA. Momentum readings like the 14-week RSI too are in rising mode and not overbought, which implies potential for further upsides.
With the intermediate technical setup too looking attractive, we expect the stock to move up towards its previous intermediate highs in the coming weeks. Buy between Rs 112-114 levels, with a stop-loss at Rs 108 and target at Rs 126.
Grindwell Norton: Buy | LTP: Rs 1,990.15 | Stop-Loss: Rs 1,900 | Target: Rs 2,150 | Return: 8 percent
Grindwell has bounced back from a low of Rs 1,725 touched in March 2023 where it made a 6-month low. The stock has since then gradually climbed higher and made a higher bottom in the process. The rise was accompanied with healthy volumes, which augurs well for the uptrend to continue.
Technical indicators are giving positive signals as the stock is trading above the 20 and 50-day SMA. Momentum readings like the 14-week RSI too are in rising mode and not overbought, which suggests potential for more upsides.
With the intermediate setup too looking attractive, we expect the stock to move up towards its previous intermediate highs in the coming weeks. Buy between Rs 1,980-2,020 levels, with a stop-loss of Rs 1,900 and target at Rs 2,150.
Expert: Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities
Axis Bank: Buy | LTP: Rs 910.65 | Stop-Loss: Rs 890 | Target: Rs 950-970 | Return: 6.5 percent
In the past week, the stock rallied over 5 percent and also formed long bullish candle. After a short term correction, the stock consistently forming higher bottom formation and comfortably trading above 20 and 50-day SMA (simple moving average) which is largely positive.
For the positional traders now, Rs 890 would be the important support level to watch out. If the stock manages to trade above the same then we can expect uptrend continuation wave up to Rs 950-970.
Bata India: Buy | LTP: Rs 1524.45 | Stop-Loss: Rs 1,450 | Target: Rs 1,600-1,650 | Return: 8 percent
After a long correction eventually, the stock took the support near Rs 1,400 and reversed. Post reversal formation, it comfortably trading above 20 and 50-day SMA (simple moving average).
In addition, a promising reversal continuation formation on weekly charts and higher high higher low series on daily and intraday charts indicating further uptrend from the current levels.
Unless it trading below Rs 1,450, positional traders retain an optimistic stance and look for a target Rs 1,600-1,650. Fresh buying can be considered now and on dips, if any between Rs 1,525 and Rs 1,490 levels with a stop-loss below Rs 1,450.
Mahindra & Mahindra: Buy | | LTP: Rs 1,275.95 | Stop-Loss: Rs 1,240 | Target: Rs 1,315-1,335 | Return: 5 percent
On last Friday, the stock rallied nearly 2 percent and after a long time it succeeded to close above 200-day SMA level. Technically, on weekly charts it has formed bullish candle and on daily and intraday charts it is holding uptrend continuation formation.
We are of the view that, the short term texture of the stock is bullish and uptrend wave is likely to continue in the near future.
For the trend following traders now, Rs 1,240 or 10-day SMA would act as a sacrosanct support level. Above which, it could rally till Rs 1,315. Further upside may also continue which could lift the stock till Rs 1,335. On the flip side below Rs 1,240 uptrend would be vulnerable.
Expert: Ruchit Jain, Lead Research at 5paisa.com
Axis Bank: Buy | LTP: Rs 910.65 | Stop-Loss: Rs 877 | Target: Rs 945-964 | Return: 6 percent
The uptrend in Bank Nifty index remains positive and hence we expect the private banking stocks to continue the upmove. Axis Bank has given a breakout from its previous swing high resistance on Friday and the RSI oscillator is also indicating a positive momentum.
Traders can buy this stock in the range of Rs 910-900 for potential targets of Rs 945 and Rs 964. The stop-loss for long positions should be placed below Rs 877.
Hindustan Unilever: Buy | LTP: Rs 2,623.4 | Stop-Loss: Rs 2,520 | Target: Rs 2,680-2,730 | Return: 4 percent
The stock prices consolidated in a range in last few months and have formed a support base at recent swing lows. During the week gone by, the prices have given a breakout from a falling trendline resistance.
The volumes have picked up gradually and the short term momentum also seems to be bullish. Hence, short term traders can look to buy the stock on dips towards Rs 2,600-2,580 range for potential targets of Rs 2,680 and Rs 2,730.
The stop-loss for long positions should be placed below Rs 2,520.
Expert: Mitesh Karwa, research analyst at Bonanza Portfolio
Dr Lal PathLabs: Buy | LTP: Rs 2,040.9 | Stop-Loss: Rs 1,930 | Target: Rs 2,180 | Return: 7 percent
The stock has seen breaking out of a triangle like pattern on the weekly timeframe with above average volumes and a bullish candle whereas the RSI indicator has also broken out of a downwards sloping trendline 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 cloud, conversion line and base line. Momentum oscillator RSI (14) is at around 67 on the daily time frame indicating strength by sustaining above 50.
Observation of the above factors indicates that a bullish move in stock is possible for target upto Rs 2,180. One can initiate a buy trade in between the range of Rs 2,035-2,040, with a stop-loss of Rs 1,930 on daily closing basis.
Hercules Hoists: Buy | LTP: Rs 239.5 | Stop-Loss: Rs 214 | Target: Rs 275 | Return: 15 percent
Hercules has seen breaking out of a rounding bottom formation on the monthly timeframe with a big bullish candlestick and is also trading above the highs of last four months which indicates strength.
On the indicator front the stock is trading above important EMA’s of 20/50/100/200 (exponential moving average), the supertrend indicator is indicating a bullish continuation, momentum oscillator RSI (14) is at around 78 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 on the daily timeframe.
Observation of the above factors indicates that a bullish move in Hercules is possible for target upto Rs 275. One can initiate a buy trade in the range of Rs 237-239 with stop-loss of Rs 214 on daily closing basis.
Ador Welding: Buy | LTP: Rs 1,181 | Stop-Loss: Rs 1,115 | Target: Rs 1,280 | Return: 8 percent
Ador Welding has seen breaking and sustaining above a rising wedge pattern on the weekly timeframe with a big bullish candlestick and closing at all time high levels. The supertrend indicator is also indicating a bullish continuation which supports the bullish view.
Momentum oscillator RSI (14) is at around 72 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 and base line.
Observation of the above factors indicates that a bullish move in Ador Welding is possible for target upto Rs 1,280. One can initiate a buy trade in between the range of Rs 1,177-1,181 with stop-loss of Rs 1,115 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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