The market ended 1 percent in the green at the close of the week on November 3, rebounding from 2.5 percent in the red, as global markets threw up positive vibes. The benchmark Nifty50 reached the 19,200-19,300, the crucial resistance area, which had acted as a strong support level in August. Hence, if the said level get decisively broken on the higher side, then 19,500-19,600 can't be ruled out, whereas on the lower side, 19,000-18,900 is likely to be a key support zone, experts said.
Further, the index continued its higher high, higher low formation on the daily charts, after hitting 200-day EMA (exponential moving average) on October F&O expiry day, while on the weekly scale, it has formed bullish candlestick pattern after robust bearish candlestick pattern in previous week, and traded within previous week's range.
The Nifty50 settled last Friday at 19,231, up 183 points during the week.
"From a technical perspective, the Nifty index has demonstrated a substantial rebound, particularly from the 200-day exponential moving average (DEMA). However, it's worth noting that resistance levels at 19,330, 19,440, and 19,550 pose challenges," Santosh Meena, Head of Research at Swastika Investmart said.
He feels the correction is anticipated to conclude once the Nifty surpasses the 19,550 mark, maintaining a bullish outlook as long as it stays above the 19,060 mark.
However, if the Nifty dips below this level, there is a risk of moving toward the 200-day DEMA, currently situated around 18,650, he said. If the index reaches 19,500-19,600, then it will start trading above all key moving averages (20, 50, 100 and 200-day EMA), but sustainability above these levels is key for further run in the index.
It would be advisable to lighten the long commitments in the resistance zone of 19,500-19,600, Vinay Rajani, CMT, senior technical and derivative analyst at HDFC Securities said.
"The 50-day EMA for Nifty is currently placed at 19,450 levels and same can also offer resistance in the short term. Positional charts indicate overall bearish structure for Nifty with lower top and lower bottom formation and therefore it looks difficult for Nifty to sustain above 19,500-19,600 mark in the next week," he 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 October 3 closing prices:
Expert: Viraj Vyas, CMT, Technical & Derivatives Analyst - Institutional Equity at Ashika Stock Broking
Amber Enterprises India: Buy | LTP: Rs 3,117 | Stop-Loss: Rs 2,990 | Target: Rs 3,430 | Return: 10 percent
The stock has been trading within a downward-sloping channel since the beginning of this year. However, it's anticipated to make a bullish breakout above the descending trendline, with a potential target of around Rs 3,500 levels.
An interesting development to note is the Open Interest (OI) for the stock, which has reached a one-year high. This is particularly significant considering the stock's recent declines. A high OI during a downtrend typically suggests that short positions have been continuously added.
If the stock does break out above the trendline, it could trigger a short-covering rally, as traders who had taken short positions start buying to cover their positions, potentially driving the stock higher.
Aditya Birla Money: Buy | LTP: Rs 109 | Stop-Loss: Rs 104 | Target: Rs 125 | Return: 15 percent
The stock has been undergoing a phase of both price and time correction since 2019. However, it initiated a strong uptrend in October 2023, experiencing a rapid gain in price momentum as it surged from Rs 70 to nearly Rs 100 levels.
Following a brief consolidation near a resistance zone, the stock broke out strongly last week, and this breakout was accompanied by high trading volumes. This indicates significant buying strength, and the stock is expected to continue its upward momentum, potentially heading towards Rs 125 levels.
Transformers and Rectifiers India: Buy | LTP: Rs 179 | Stop-Loss: Rs 170 | Target: Rs 200 | Return: 12 percent
The stock has been on a strong upward trajectory since August of this year, surging from Rs 70 to Rs 176 within a matter of a few months. After this impressive run, the stock entered a consolidation phase and formed an expanding triangle pattern.
However, on Friday, the stock experienced a breakout above the multi-week high, and this breakout was accompanied by heavy trading volumes. This is a positive sign for the stock, and it's likely to continue its upward movement, potentially heading towards Rs 200 levels.
Expert: Jigar S Patel, senior manager - equity research at Anand Rathi
Tata Teleservices (Maharashtra): Buy | LTP: Rs 87.30 | Stop-Loss: Rs 78 | Target: Rs 100 | Return: 14.5 percent
It has corrected approximately 25 percent since reaching a high near Rs 110 on September 15, 2023. At the current juncture, it has taken support near Rs 200 daily exponential average, i.e., Rs 85 levels, which is also the previous swing high.
On the indicator, the daily RSI (relative strength index) has made an impulsive structure near the oversold zone of 30, which is looking lucrative. One can buy in the range of Rs 84–87 with a target of Rs 100, and the stop-loss would be Rs 78 on a daily close basis.
Tata Elxsi: Buy | LTP: Rs 7,617 | Stop-Loss: Rs 7,299 | Target: Rs 8,100 | Return: 6 percent
Since the last 2 months or so, the said counter has made a nice base near the 100-daily exponential average. At the current juncture, it is nicely placed near 21 DEMA.
On the indicator front, the daily RSI has reversed from 50 levels along with an ongoing positive cross on daily DMI (directional movement index), which is looking lucrative. Thus, one can buy in the range of Rs 7,500–7,625 with an upside target of Rs 8,100 and a stop-loss of Rs 7,299 on a daily close basis.
City Union Bank: Buy | LTP: Rs 138.8 | Stop-Loss: Rs 128 | Target: Rs 155 | Return: 12 percent
City Union Bank has been under pressure for some time, but at this juncture, it is trading near its crucial support. Previously, the stock turned from this level, and we saw a rally towards Rs 200.
On the weekly chart, a range breakout has seen with massive volume, which is looking lucrative. Thus, we advise traders to go long in the stock in the range of Rs 136-139, with a stop-loss of Rs 128 and a target of Rs 155.
Expert: Mitesh Karwa, research analyst at Bonanza Portfolio
Bayer Cropscience: Buy | LTP: Rs 5,193 | Stop-Loss: Rs 4,900 | Target: Rs 5,700 | Return: 10 percent
Bayer Cropscience has seen breaking out of a downward sloping parallel channel pattern on the weekly timeframe after almost three years with a bullish candlestick and above average volumes. In addition, 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 57 on the daily time frame indicating strength by sustaining above 50.
Observation of the above factors indicates that a bullish move in Bayer Cropscience is possible for target upto Rs 5700. One can initiate a buy trade in between the range of Rs 5,182-5,192, with a stop-loss of Rs 4,900 on daily closing basis.
Apollo Hospitals Enterprise: Buy | LTP: Rs 5,153 | Stop-Loss: Rs 5,040 | Target: Rs 5,342 | Return: 4 percent
Apollo Hospitals Enterprise has seen taking support from an important support zone on the weekly timeframe with a bullish candlestick and above average volume after one year which indicates strength as 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 62 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 the stock is possible for target upto Rs 5,342. One can initiate a buy trade in between the range of Rs 5,148-5,153, with a stop-loss of Rs 5,040 on daily closing basis.
Expert: Riyank Arora, technical analyst at Mehta Equities
Action Construction Equipment: Buy | LTP: Rs 840 | Stop-Loss: Rs 800 | Target: Rs 900-920 | Return: 9.5 percent
The stock has given a good all-time high breakout and now seems to re-test the breakout level.
With the overall structure being positive and the stock witnessing good buying on every decline, one can buy at current market price with a stop-loss of Rs 800 for target of around Rs 900 and Rs 920.
Zomato: Buy | LTP: Rs 116.50 | Stop-Loss: Rs 110 | Target: Rs 127.5-130 | Return: 12 percent
With the stock giving a good breakout above the resistance zone of Rs 115 to Rs 116 and the sharp rise in volumes has added to momentum and strength on the stock. Overall structure looks positive. One can buy the stock at current market price, with a stop-loss of Rs 110, and target of Rs 127.50 and Rs 130.
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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