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Top 10 trading ideas for next 3-4 weeks in a market moving largely sideways

Breaching either side of 18,200-18,450 range can give some kind of direction to the market in the coming days, but having a monthly expiry and FOMC minutes scheduled this week, volatility and consolidation is at the top before any kind of big move on either side of range

November 21, 2022 / 10:20 AM IST
 
 
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The market has seen rangebound trade in the week ended November 18 after a run-up for four weeks in a row amid lack of domestic triggers and cautious global cues. The Nifty50 has taken a good support at 18,200 and nicely defended 18,300 mark after moving higher close to 18,450 levels during the last week.

Hence, breaching either side of this range can give some kind of direction to the market in coming days, but having a monthly expiry and FOMC minutes scheduled in current week, the volatility and consolidation is at the fore before any kind of big move on either side of range, experts said.

The Nifty50 snapped its four-week winning streak and fell 42 points to close the week at 18,308, while the Nifty Midcap 100 and Smallcap 100 indices corrected 1.5 percent and 1 percent, respectively.

"The structure remains upbeat. As far as levels are concerned, the bullish gap of 18,100-18,250 is likely to provide a cushion to any intra-week blip, and it is highly anticipated that the dip would augur well for the bulls," Sameet Chavan, Chief Analyst-Technical and Derivatives at Angel One said.

On the flip side, 18,450-18,500 is a significant hurdle for the bulls, and any decisive breach above the same could only trigger a fresh round of rally in the market.

The market awaits some trigger points to have an upsurge, and in the meantime, the index is expected to remain in the mentioned range, Sameet feels.

"We remain sanguine with the uptrend and would advocate the traders to utilize the dips to add long position in the index," said the market expert who expects some interesting moves to unfold in a larger pool of stocks, which is likely to provide better opportunities for momentum traders.

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 18 closing prices:

Expert: Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities

Reliance Industries: Buy | LTP: Rs 2,597.65 | Stop-Loss: Rs 2,565 | Target: Rs 2,680 | Return: 3 percent

Since the stock has absorbed the selling pressure at Rs 2,550, it is in an uptrend with the formation of a higher bottom and a higher top series.

On last Friday, it formed a bullish reversal after hitting the higher support at Rs 2,571. As per the ascending parallel channel, the stock may touch Rs 2,680 levels with major resistance at Rs 2,642.

Traders should currently be buyers and on dips at Rs 2,580, with a stop-loss at Rs 2,565 level.

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Sterlite Technologies: Buy | LTP: Rs 177.7 | Stop-Loss: Rs 169 | Target: Rs 200 | Return: 12.5 percent

On a daily chart, the stock was forming a bullish continuation formation since September 14, On last Friday, the stock managed to surpass the resistance at Rs 176, which should lift the stock to Rs 200 level in the coming few days or weeks.

It’s a buy at current levels and keep a stop-loss at Rs 169. Oscillators are confirming the upward break out.

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Mahindra Holidays and Resorts India: Buy | LTP: Rs 273 | Stop-Loss: Rs 260 | Target: Rs 343 | Return: 26 percent

On the daily chart, the stock is making a gradual upward move, however, on a weekly basis, it is forming a pattern of "V" shaped recovery, which is a bullish sign and it will give the stock a bullish momentum.

In the medium term, the stock can move to Rs 343. In the short term, there is consolidation between Rs 288 and Rs 260 depending on the weekly formation.

The strategy should be to buy at Rs 273 and hold at Rs 265. Keep the stop-loss at Rs 260 on a closing basis. On the upside, barriers will lie at Rs 288, Rs 310, and Rs 343.

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Expert: Ruchit Jain, Lead Research at 5paisa.com

Larsen & Toubro: Buy | LTP: Rs 2,024 | Stop-Loss: Rs 1,970 | Target: Rs 2,085 | Return: 3 percent

The stock has recently formed a ‘Higher Top Higher Bottom’ structure and is thus in an uptrend. The prices have recently given a breakout from its trendline resistance and the volumes in the prices upmoves are good.

The RSI oscillator on the daily as well as the weekly chart is also hinting at a positive momentum. The ’20 DEMA’ has acted as a support in last couple of weeks and thus we expect the stock to continue its uptrend till this support is intact.

Hence, traders can buy the stock around current market price of Rs 2025 for potential short term target around Rs 2,085. The stop-loss on positions should be placed below Rs 1,970.

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Lumax Industries: Buy | LTP: Rs 1,785 | Stop-Loss: Rs 1,670 | Target: Rs 1,980 | Return: 11 percent

The stock has rallied higher in last six months and is in an uptrend. In last few trading sessions, it witnessed buying interest on intermediate corrections and stock has given a breakout in Friday’s session. It has also been showing a relative outperformance within the midcap space and the chart structure indicates that the uptrend could continue in the near term.

Hence, traders can look to buy the stock around current market price of Rs 1,785 for potential targets around Rs 1,900 and Rs 1,980. The stop-loss for long positions should be placed below Rs 1,670.

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Expert: Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Investment Services

Glenmark Pharma: Buy | LTP: Rs 410 | Stop-Loss: Rs 380 | Target: Rs 450 | Return: 10 percent

Glenmark Pharma has witnessed a very sharp correction of 49 percent between July 2021 and June 2022. Since then the stock has been consolidating between Rs 360-400 (see chart) and it has made a solid base near Rs 375 levels.

On a weekly scale, said counter has formed an Inverted Bullish Hammer near support zone along with weekly RSI has formed an impulsive structure which is adding more confirmation for upside in coming days.

One can hold (if already bought) and add (if considering fresh buy) at the current market price. Upside is expected till Rs 450 with credible support at Rs 380.

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Balrampur Chini Mills: Buy | LTP: Rs 351 | Stop-Loss: Rs 320 | Target: Rs 410 | Return: 17 percent

Since April 2022, the counter observed a free fall from Rs 526 to Rs 331 and it has stabilized near its historical support of Rs 325. From the candlesticks pattern perspective, during the October month counter displayed Doji followed by bullish Harami along with volume steadily increasing which is a hinting upside.

From the indicator perspective, daily RSI (relative strength index) has made an impulsive structure near the oversold zone which further confirms the upside in the counter.

One can buy in a small tranche at current levels and buy another tranche at around Rs 340 levels. The upside target is expected till Rs 410, with a stop-loss of Rs 320.

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Pfizer: Buy | LTP: Rs 4,485 | Stop-Loss: Rs 4,250 | Target: Rs 4,900 | Return: 9 percent

Since September 2021, the counter observed a free fall from Rs 6,080 to Rs 4,070 and has stabilized near its historical support of Rs 4,100. From the candlesticks pattern perspective during the August 2022 month, the counter displayed pair of Dojis followed by a bullish Engulfing pattern along with volume steadily increasing which is a hinting upside.

From the indicator perspective, the weekly RSI (relative strength index) has made a complex structure near the oversold zone which further confirms the upside in the counter.

One can buy in a small tranche at mentioned levels and buy another tranche at around Rs 4,400 levels (if retested again). The upside target is expected till Rs 4,900, with a stop-loss of Rs 4,250.

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Expert: Vinay Rajani, Senior Technical & Derivative Analyst at HDFC Securities

MAS Financial Services: Buy | LTP: Rs 826.75 | Stop-Loss: Rs 770 | Targets: Rs 910-950 | Return: 15 percent

On week ended November 4, 2022, downward sloping trend line breakout was registered on the weekly charts. Price breakout was accompanied by jump in volumes.

Now, the stock has retraced back to the previous breakout line and could resume its uptrend. It is placed above all important moving averages, indicating bullish trend on all time frames. The stock price has been forming higher tops and higher bottoms on daily chart.

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NLC India: Buy | LTP: Rs 78 | Stop-Loss: Rs 72 | Targets: Rs 86-91 | Return: 17 percent

The stock price has broken out from the bullish Cup and Handle pattern on the daily chart. Price Breakout is accompanied with jump in volumes.

It is placed above all important moving averages. PSU sector has been outperforming for last many months. Indicators and oscillators have turned bullish on daily and weekly charts.

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GMM Pfaudler: Buy | LTP: Rs 1,931 | Stop-Loss: Rs 1,740 | Target: Rs 2,060-2,170 | Return: 12 percent

On week ended September 2, 2022, the stock broke out from multiple top resistance Rs 1,750 and also from the consolidation with significant jump in volumes. Post breakout stock rallied towards Rs 2,097 odd levels and fell in the consolidation.

It continued to remain in narrow consolidation for last two months. On November 16m 2022, the stock touched lower band of the consolidation and reversed north with rise in volumes.

Indicator and oscillators like RSI (relative strength index) and MACD (moving average convergence and divergence) have been showing strength in current uptrend. The stock price has been finding support on its 50 days EMA (exponential moving average) placed at Rs 1,821.

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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Sunil Shankar Matkar