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Top 10 trading ideas from experts for next 3-4 weeks as market snaps five-week losing streak

The broader market has started to show some encouraging signs, with the Nifty Midcap 100 and Smallcap 100 indices rising 3 percent and 4 percent. This should do extremely well if the market remains above the psychological support of 16,000

May 23, 2022 / 07:39 AM IST
 
 
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The market snapped a five-week losing streak and closed 3 percent higher in the week ended May 20. Volatility remained on the higher side amid the Ukraine-Russia crisis, and fear of aggressive rate hikes by the Federal Reserve.

After losing more than 11 percent in the previous five weeks, the Nifty50 closed decisively above 16,000 mark at 16,266, up nearly 500 points and formed a bullish candle on the weekly scale. The index also closed way above 5 and 10 days simple moving averages whose value placed above 16,060 levels.

The index has not fallen below its March lows (15,671) and also held strongly above the 15,700 mark, which both could act as strong support levels in coming days and sustaining above 16,000 could take the index beyond 16,600 mark, experts said.

"With reference to previous week's commentary, 15,700 – 15,600 stands to be a very solid support; because it coincides with the '89-EMA' (exponential moving average - 15,658) on weekly chart which has proved its mettle many times over the past many years. Yes we are not completely out of the woods but at least we are well above the crucial support zone," Sameet Chavan, Chief Analyst-Technical and Derivatives at Angel One, said.

On the flipside, he said, the cluster of resistance is placed around 16,400 – 16,500 – 16,600. "And till the time we do not surpass it convincingly, one should avoid being complacent. At this juncture, we are clearly mirroring US markets' sentiments and hence, if market has to move higher, the global relief is the key."

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Also, the broader market has started to show some encouraging signs, with the Nifty Midcap 100 and Smallcap 100 indices rising 3 percent and 4 percent, respectively. "This we believe should do extremely well if market remains above the psychological support of 16,000," Sameet Chavan said.

Here are top 10 trading ideas by experts for the next three-four weeks. Returns are based on the May 20 closing prices:

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

Chalet Hotels: Buy | LTP: Rs 302.3 | Stop-Loss: Rs 285 | Target: Rs 335 | Return: 11 percent

The stock has been finding support on its 50 days EMA (exponential moving average) for last one month. Primary trend of the stock is bullish as stock is trading above all important moving averages. Indicators and oscillators have been showing strength in the current uptrend.

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Elecon Engineering: Buy | LTP: Rs 204.65 | Stop-Loss: Rs 195 | Target: Rs 227 | Return: 11 percent

The stock has surpassed the previous top resistance of Rs 200 with rising volumes. Stock has broken out from bullish Inverted Head and Shoulder pattern on the weekly charts.

It has been forming higher tops and higher bottoms on the daily charts. Indicator and oscillator setup is bullish on short to medium term charts.

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KSB: Buy | LTP: Rs 1,455.3 | Stop-Loss: Rs 1,350 | Target: Rs 1,595 | Return: 10 percent

The stock surged more than 8 percent with a jump in volumes on May 20, 2022. It has registered fresh all-time high of Rs 1,484. It has broken out from the “flag” pattern on the weekly charts.

It is placed above all important moving averages, which indicates a bullish trend on all time-frames. Indicators and oscillators have been showing strength in the current uptrend.

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

KEC International: Buy | LTP: Rs 379.9 | Stop-Loss: Rs 345 | Target: Rs 440 | Return: 16 percent

The stock is turning positive on the daily chart. For the past two months, the major oscillator MACD (moving average convergence divergence) has been trending up, while the price is making lower lows, indicating a change in the prevailing trend in the near future.

It had formed the lowest level at Rs 345 and bounced back sharply. We expect further upside in the near term. It is at Rs 380 and the strategy should be to buy at current levels and add more at Rs 355. For this, keep the stop-loss at Rs 345. At higher levels, the stock would face resistance at Rs 410 and Rs 440.

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Nestle India: Buy | LTP: 16,862 | Stop-Loss: Rs 16,000 | Target: Rs 18,500 | Return: 10 percent

The stock was in an extended corrective wave. In September 2021, it was at Rs 20,610 and, in the last week, it was at Rs 16,000. Technically, we think it has completed the correction at Rs 16,000 and has bounced back sharply along with sectoral movement.

Until the stock breaks the Rs 16,000 level, it will continue to move higher. During the corrective pattern, the stock spent the maximum time at Rs 18,500, which should be its first price target. Our advice is to buy at the current levels and place a stop-loss at Rs 16,000.

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Grasim Industries: Buy | LTP: Rs 1,488.35 | Stop-Loss: Rs 1,430 | Target: Rs 1,600 | Return: 7.5 percent

The stock is forming a double-bottom formation at Rs 1,430. It is still in corrective mode, however, the Rs 1,400 level should act as a trend decider level for the stock.

Unless the stock breaks the Rs 1,430 level, we can see the stock rallying towards Rs 1,575-1,600 level. Last year also the level of Rs 1,430 acted as the key support and helped the stock to take the level of Rs 1,600 at the minimum level and Rs 1,800 level at the maximum.

It is advisable to buy between Rs 1,500 and Rs 1,450 levels. However, stop-loss is mandatory at Rs 1,430 level.

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Expert: Ajit Mishra, VP-Research at Religare Broking

Inox Leisure: Buy | LTP: Rs 493 | Stop-Loss: Rs 465 | Target: Rs 540 | Return: 10 percent

Inox Leisure witnessed a marginal dip after making a new record high and retraced to the support zone of the neckline (breakout) area of the previous consolidation range. It has spent nearly two weeks around that zone while holding firmly above the support zone of medium term moving average (100 EMA) on the daily chart.

All indications are in the favour of a steady rise from hereon. We thus recommend accumulating within Rs 485-490 levels.

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TVS Motor Company: Buy | LTP: Rs 684.55 | Stop-Loss: Rs 640 | Target: Rs 750 | Return: 10 percent

We see a decent traction in the auto space despite the prevailing corrective phase and TVS Motor is among the top performers.

Broadly, it has been consolidating in a range and currently trading around the upper band of the same. The chart pattern indicates a strong possibility of a breakout so traders can consider initiating long positions within Rs 680-685 levels.

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Deepak Nitrite Futures: Sell | LTP: Rs 1,972 | Stop-Loss: Rs 2,085 | Target: Rs 1830 | Return: 7 percent

It has been trading in a declining channel for the last seven months and currently trading below the support zone of major moving averages.

The recent upswing has resulted in the formation of a fresh shorting pivot which may result in a decline towards the lower band of the channel ahead. We thus recommend creating shorts on an uptick within Rs 1,980-2,000 zone.

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

Britannia Industries: Buy | LTP: Rs 3,450.25 | Stop-Loss: Rs 3,340 | Target: Rs 3,640 | Return: 5.5 percent

The FMCG space has recently bucked the trend and inspite of the broader market correction, certain stocks from this sector have managed to hold well. This stock was trading in a falling channel and after some consolidation; prices have given a breakout from the channel.

The ‘RSI Smoothened’ oscillator, too, is indicating a positive momentum and thus, we expect an up move in prices in the near term.

Hence, traders can look to buy the stock in the range of Rs 3,450-3,430 for potential target of Rs 3,640 in next few weeks. The stop-loss for long positions can be placed below Rs 3,340.

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Ashok Leyland: Buy | LTP: Rs 130.35 | Stop-Loss: Rs 122 | Target: Rs 144 | Return: 10.5 percent

Recently, the stock has managed to show a relative outperformance during market correction and the prices have given a breakout from its resistance zone on Friday. The breakout was supported with high volumes which is a positive signs.

Also, it has resumed the ‘Higher Top Higher Bottom’ structure which indicates that this stock could witness further buying interest in the near term.

Hence, traders can look to buy the stock in the range of Rs 130-127 for potential target of Rs 144 in next few weeks. The stop-loss for long positions can be placed below Rs 122.

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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.
Sunil Shankar Matkar
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