The Nifty 50 settled just above 21,850, resulting in 0.72 percent daily gains and 2.38 percent weekly gains. Pricewise, it may seem that bulls had an upper hand through the eventful week ended February 2, however, Friday's notable profit-booking in the latter half indicates some uncertainty at higher levels.
Examining Friday's candle, we can see a formation that resembles a 'shooting star' pattern at a new all-time high. This has a negative implication once prices start trading below the low of the candle i.e. 21,805 and certainly casts doubt on bullish prospects. Although the prices seem rangebound, caution is advised for traders due to a complete nosedive in financial space, which proves to be a spoilsport once again.
Traders are advised to avoid complacent long bets and ideally, any bounce towards 22,000 - 22,100 should be considered to exit long positions. The primary up-trend will resume only once the Nifty closes above 22,100 comfortably.
Conversely, immediate support is seen at 21,650, followed by 21,430, with a breach potentially triggering further weakness in the near term.
Here is one buy call and one sell call for short term:
Latent View Analytics: Buy | LTP: Rs 485.45 | Stop-Loss: Rs 459.80 | Target: Rs 528 | Return: 9 percent
The entire IT space, especially the midcap basket, has done phenomenally well over the past few months; but this stock is yet to prove its mettle. All this while, the stock prices have been trading in higher highs, higher lows formation, but the momentum has been lacking.
We can see a series of consolidation phases following any short burst move. Now on Friday, we have observed a similar breakout potential move, but this time it’s backed by consistent volumes.
Hence, we expect the stock to now catch up with some of its peer counters. We recommend buying on a decline up to Rs 480 for a trading target of Rs 528. The stop-loss can be placed at Rs 459.80.
Jubilant Foodworks: Sell | LTP: Rs 494.85 | Stop-Loss: Rs 512 | Target: Rs 474 | Return: 4 percent
This one of the largest food service companies has been on a declining mode since the fag end of the December month. In this process, it has not only breached key price swings but also sneaked below the key moving averages like ’89-day EMA’ (exponential moving average) and ‘200-day SMA’ (simple moving average).
In addition, the ‘RSI-Smoothened’ oscillator has dipped below the 15 mark, indicating significant underperformance of the prices. Since there is no respite for this corrective move, we expect further decline in the coming days.
We recommend selling around Rs 498 for a near-term target of Rs 474. The strict stop-loss needs to be placed at Rs 512.
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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