Traders are advised to stay positive and try to identify potential candidates that have probably given decent corrections and are now gearing up for the next leg of the rally
The inaugural week of the new financial year kicked off higher owing to cheerful mood across the globe. However, this early lead could not be extended much due to lack of follow-up buying on the subsequent days.
On April 3, Nifty did register a new high but it was not even by a single point and hence, eventually turned out to be just a formality.
We saw modest profit booking after this development in the next couple of days. The index finally closed below the 11,700 for the week. Fortunately, this profit booking did not extend further as we saw good traction across the board on April 5 to conclude the first week on a positive note.
As far as direction is concerned, we are still in a strong uptrend. Yes, in between, we may see hiccups but one should not be intimidated by such declines.
Many stocks have entered an extremely overbought territory that could lead to some cooling off and to a certain extent, this is what we have seen in the last couple of days.
However, this certainly doesn’t change the trend. In fact, it should be considered as a healthy correction to see a sustainable rally in the near-term.
We advise traders not to look for shorting opportunities, rather use dips to buy into some quality propositions. For this week, 11,720–11,760 needs to be watched out for.
It is a matter of time, we would see index surpassing these levels and entering uncharted territory. On the downside, 11,609 followed by 11,593 would now be seen as key support levels for the index.
Traders are advised to stay positive and try to identify potential candidates that have probably given decent corrections and are now gearing up for the next leg of the rally.
Here are two stocks that could give 7-10 percent return in the next 1 month:
UltraTech Cement: Buy| LTP: Rs 4,190| Target: Rs 4,610| Stop loss: Rs 3,975| Upside: 10 percent
Cement stocks were on a roll on April 5. UltraTech, after forming a base around 89-EMA for the last two weeks, has broken out from of its recent consolidation confirming a bullish breakout.
On the daily chart, the stock prices have confirmed a bullish reversal pattern known as ‘inverse head and shoulder’. The said pattern breakout has come with double of its average daily volume.
Considering the evidence, we recommend buying at current levels for a target of Rs 4,610 and the stop loss should be fixed at Rs 3,975.
Tata Steel: Buy| LTP: Rs 549| Target: Rs 590| Stop loss: Rs 526| Upside: 7 percent
We have been contradictory buyers in the metal space since the beginning of February series and Tata Steel has been our preferred pick from the space.
In the last month and a half, this marquee name within this universe has already given more than 20 percent return.
But, still, we continue with our optimistic stance and from here on we expect further gains. Technically speaking, we have witnessed a fresh breakout in the counter after struggling around 200-day SMA for nearly 4-5 days.
With April 5 strong bump up, the stock prices have traversed this hurdle along with a substantial rise in volume. Thus, we recommend buying at current levels for a target of Rs 590 and the stop loss should be fixed at Rs 526.
The author is Chief Analyst- Technical & Derivatives, Angel Broking.Disclaimer: The views and investment tips expressed by investment expert on 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.