This week, our projected targets are around 12,200-12,290. If we stretch the time period a bit, we will not be surprised to see the index heading towards 12,400-12,500 levels, which coincides with key Fibonacci ratios
In the penultimate week, we saw some indecision in the Nifty market around the 12,000 mark, which eventually resulted in a decline towards 11,900 levels.
We have been quite vocal since the last few weeks that it is a matter of time before we see the Nifty clock fresh highs and finally it has become a reality.
The benchmark index has registered its highest ever weekly as well as monthly close and the way charts are shaped up, we expect a continuation of the northward trajectory.
This week, our projected targets are around 12,200-12,290. If we stretch the time period a bit, we will not be surprised to see the index heading towards 12,400-12,500 levels, which coincides with key Fibonacci ratios.
On the lower side, 12,000 followed by 11,883 are likely to provide strong support to the market. Traders are advised not to remain sceptical as the recent rally has been vertical in nature and looks a bit overbought.
In such a strong trend, the market generally tends to offer gravity-defying moves. Hence, one should refrain from taking contradictory bets with a positional view.
One should rather use declines to go long and keep focusing on potential stocks that are likely to participate in the probable rally.
Here is a list of top two stocks that may return 6-19 percent in the next three-to-four weeks:
Union Bank: Buy| LTP: Rs 63.05| Target: Rs 75| Stop Loss: Rs 56| Upside 19%
After a prolonged underperformance, PSU Banks have revived from their lows in the last few weeks. It would be too early to expect this as an absolute bottom but certainly looks like they are all set for a decent move in the near term at least.
The daily chart exhibits a bullish reversal pattern breakout known as ‘Inverse Head and Shoulder’. The said breakout is supported with a good increase in volume and bullish candlestick pattern.
In addition, momentum oscillators on the weekly chart have just come out of its oversold zone suggesting a further potential up move in the near term.
Thus, we recommend buying this stock at current levels for a target of Rs.75 in the next few days. The stop loss should be fixed at Rs.56.
Lupin: Buy| LTP: Rs 800.65| Target: Rs 850| Stop Loss: Rs 781| Upside 6%
Since the last three weeks, we have been consistently recommending this stock and in the process, it has already rallied from the levels of 743. Despite this run up, we still believe that the stock is not done with its short term move.
After a long underperformance, we are seeing signs of revival in ‘Pharma’ space and this being the marquee name within this, precisely replicates the chart structure of ‘Pharma’ index.
The weekly chart depicts a Higher Top Higher Bottom formation for the first time in many months and importantly, the rally is accompanied by considerably higher volumes.
Considering all this, we expect an extension of the rally and hence, traders are advised going long for a target of Rs.838 – 850 over the next few days. The stop loss should be fixed at Rs.781.
(The author is chief analyst-technical & derivatives, Angel Broking)Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com<http://moneycontrol.com> are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.