By Pushkaraj Sham Kanitkar
The Nifty closed the week, month as well as the financial year at an all-time closing high of 9,173.75 on Friday, and it rallied further on Monday to hit a fresh record closing high of 9,237.
The dynamics of the market stand largely unchanged. The index still remains in a consolidation phase trading in a range of 8,950-9,200. The low of last 2 weeks placed at 9,020 corresponds to a double bottom (basically hourly charts).
For the coming sessions, if the index manages to hold 9,020 levels, then prices may see an extension towards 9,300-9,500 mark. On the flip side, a break below 9,020 may take the index towards 8950-8900 mark.
The level of 8,950 further gathers significance, as around those levels the market also closes the GAP that market created from close of 8,934 on March 10, 2017 to open of 9,092 on March 14, 2017.
While the Nifty may remain on a consolidation path, stock-specific movements could be the flavour of the week. Here is a list of top five stocks to track based on technical parameters.
L&T: BUY| Target Rs 1,750| Stop Loss Rs 1,491| Upside 5 percent
L&T registered series of higher top & higher bottom formations since December 2016, after a sustained correction of 6 months spanning a move from around Rs 1,615 to Rs 1,300.
The current leg sprang up in the form of a gap-up from Rs 1,491 on 10th March to Rs 1,517 on 14th March. This move has sustained very well after almost a month’s consolidation between Rs 1,446 and Rs 1,515.
The delivered volume in the stock is one marker that the scrip is changing hands onto strong hands. This would in a way open the gates to the distribution phase of 2014 around the Rs 1,750-1,800 mark.
Exide Industries: BUY| Target Rs 250| Stop Loss 195| Upside 8 percent
The stock remained in a rational uptrend all through the last one year, the prices showed an intermediate dip from Rs 200 to Rs 165 spanning the months of Nov-Dec 2016.
The period also saw the formation of a double bottom on daily charts that corresponded to testing of the 200 DMA, which was then placed at Rs 169 mark.
The latest leg has seen a consolidation breakout spanning Rs 200-220 spanning over Feb-Mar 2017. A rising average traded price (ATP) on daily charts along with the RSI shifting base to a higher trajectory, is an add-on to the bullish sentiment.
We feel dynamics are ripe for an up-move to the 250 mark, which may further get extended to the 275 mark. The stop may be placed a bit below the consolidation zone at the 195 mark.
ZEE Entertainment: BUY| Target Rs 585| Stop Loss 495| Upside 10 percent
The daily charts show a series of higher top and higher bottom formations since December 2016, after a sustained 3-month correction that spanned from Rs 585 to Rs 430 between October and December 2016.
The current leg has seen positive crossovers of long-term moving averages in March 2017, with 50-DMA going above the 100-DMA as well as the 200-DMA.
We feel this positive crossover may take prices through to at least the 52-week high placed at Rs 585. The view may get negated on a closing below the breakout level of around Rs 495.
Adani Power: BUY| Target Rs 48-60| Stop Loss Rs 33.5| Upside 20 percent
The charts are showing a high momentum move over last 4 months, which has seen prices shoot from Rs 28 mark to the current level of Rs 40 (around 50 percent). The last 3 months have seen a positive crossover of the longer term moving averages with 50-DMA above the 100-DMA, which in turn is also trading above the 200-DMA.
The long-term charts indicate a space till Rs 48, which may extend even to a level of Rs 60 over coming quarter. The up-move may get hindered if prices move down below the Rs 33.5 mark
Ajanta Pharma: SELL| Target Rs 1,525| Stop Loss Rs 1,850| Return 12 percent
In line with the overall weak trajectory in the pharma sector, the prices have remained subdued spanning in the last 3 months. The last 2 weeks have seen prices moving down to Rs 1,760 after testing the facing a stiff resistance at the moving average convergence around the Rs 1,800-1,850 mark.
The level also has multiple touch points with highs of January and March 2017. The prices are on course for a correction to the 6-month lows around the 1525 mark. The bearish view would stand negated only on a closing above the Rs 1,850 mark.
Disclaimer: The author is AVP - Technical Research at GEPL Capital. The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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