It was a volatile week for the Indian markets, but the Nifty50 bounced back after hitting a low of 15,513 on July 28 (intra-day) to close above the 157,00 level on Friday. However, on a weekly basis, the index closed with losses of 0.39 percent.
The markets came under pressure, largely on account of weak global cues, muted June quarter results, and a sell-off in the pharma space as well as a rise in the Delta variant cases of Coronavirus.
The momentum remained strong for the broader markets as both the mid-cap and small-cap indices ended with gains of 0.8 percent and 1.1 percent, respectively. On the sectoral front, banking fell more than a percent, followed by auto, which witnessed selling pressure owing to subdued results from Maruti and TVS Motor.
The July expiry closed flat with a mild negative bias. Technical experts are of the view that the index is stuck in a range of 400-500 points, where 15,900-16,000 are acting as a stiff resistance and 15,450-15,500 as the crucial support.
“If we take a glance at the intra-month movement as well, we can see the Nifty trapped in a slender range of 500 points. Today being the monthly close, the monthly chart now exhibits two back-to-back Doji candles, with very small upper and lower shadows,” Sameet Chavan, Chief Technical & Derivatives Analyst, Angel Broking, said.
“This is clearly a sign of consolidation and the market seems unsure of this direction. In such a scenario, one should avoid taking any directional view till the time we do not get a range breakout on either side,” he said.
Chavan further added that as far as the levels are concerned, 15,850, followed by 15,950, are the levels to watch out for. On the flip side, the sacrosanct support is placed at 15,550 – 15,450.
If a breakout takes place in the northward direction, we may not see any bigger move. If it happens downwards, brace yourself for some tough times.
We have collated a list of 10 trading ideas from various experts for the August series.
Mehul Kothari, AVP, Technical Research, AnandRathi
Godrej Properties Ltd: Buy| LTP: Rs 1602| Stop Loss: Rs 1480| Target: Rs 1780| Upside: 11%
Godrej Properties is a heavyweight from the Nifty Realty index, which has confirmed a breakout. Even the stock has confirmed a multi-year breakout recently.
We expect a faster move, since the stock has closed above the Rs 1,600 mark. Traders can go long at the current price, with a stop-loss of Rs 1,480, for an upside target of Rs 1,780.
PFC: Buy| LTP: Rs 130| Buy Above Rs 135| Stop Loss: Rs 125| Target: Rs 155| Upside: 14%
The PFC monthly chart construes that the stock is on the verge of a breakout from its lifetime high of Rs 136. Before confirming that breakout, PFC has already confirmed a breakout from a pattern which resembles a symmetrical triangle.
Even the monthly RSI is about to come out of the falling trend line resistance and that can give immense strength to the stock. Since the stock has a habit of giving whipsaws more often, we advise traders to buy the stock on confirmation.
Thus, traders are advised to buy the stock only above Rs 135, with a stop-loss of Rs 125, for an upside potential target of Rs 155 in the coming weeks.
Punjab National Bank: Buy| LTP: Rs 39.50| Stop Loss: Rs 35| Target: Rs 48| Upside: 21%
A couple of months back, PSU banks surprised everyone by displaying a decent rally. After that, they corrected a bit and even consolidated.
PNB, too, did the same. The weekly chart of PNB indicates that the stock has confirmed a breakout and has now retested the same.
We are witnessing a Hammer kind of formation on a weekly scale. Also, the stock has confirmed a Higher Bottom, Higher Top pattern on the larger degree, which indicates a change of trend.
Even the monthly RSI has crossed the decisive level of 40, which suggests strength. Traders are advised to buy the stock near Rs 39.5, with a stop-loss of Rs 35, for an upside target of Rs 48 in the coming weeks.
Aditya Agarwala, Senior Technical Analyst, YES SECURITIES
L&T: Buy| LTP: Rs 1601| Target: Rs 1750| Stop Loss: Rs 1520| Upside 9%
The stock has resumed its uptrend after breaking out from a narrow consolidation phase and trendline resistance on good volumes. The RSI, turning upwards beyond the 60 level, suggests extended upside in the stock.
Axis Securities Ltd
Max Healthcare: Buy| LTP: Rs 296| Target: Rs 318-327| Stop Loss: Rs 276| Upside 10%
On the daily chart, the stock has witnessed multiple resistance breakouts around the Rs 285 levels, which signals a resumption of the uptrend.
Huge volumes on the breakout signal increased participation near the breakout zone. The stock is in a strong uptrend. Max Healthcare Institute Ltd continues to form a series of higher tops and higher bottom formations across all time frames.
The stock is well-placed above its 20, 50, and 100-Days SMA, which reconfirm the bullish trend. The daily and the weekly strength indicator RSI is placed above the 50-mark, which supports rising strength.
This analysis indicates an upside of Rs 318-327 levels. The holding period is 3-4 weeks.
Aarti Industries: Buy| LTP: Rs 934| Target: Rs 980-1025| Stop Loss: Rs 890| Upside 9.7%
On the daily chart, the stock has witnessed a Rounding Bottom formation breakout at the Rs 920 levels. This momentum also emerged from its 20- and 50-day SMA support zones, which reconfirm bullish sentiments.
Rising volumes at the breakout zone signals an increased participation on July 30, 2021, correction. The stock is well-placed above its 20, 50, and 100 day-SMA, which supports bullish sentiment.
The daily and weekly strength indicator, RSI, is in a bullish mode, which supports rising strength as well as momentum. This indicates an upside of Rs 980-1,025, and the holding period is 3-4 weeks.
IGL Ltd: Buy| LTP: Rs 558| Target: Rs 590-610| Stop Loss: Rs 535| Upside 9.3%
For the past 6-7 months, the stock has seen strong accumulation within the Rs 480-580 levels. On the daily chart, the stock has gained a good buying momentum from its 61.8 percent Fibonacci Retracement support of Rs 537.
This support also coincides with its 50-day SMA which remains a crucial July 30, 2021, support to watch out for. On the daily chart, the stock continues to scale upward, forming Higher Tops and Bottoms.
The daily and weekly RSI is in a bullish mode. With a positive crossover, it supports rising strength. The above analysis indicates an upside of Rs 590-610 level.
SMC Global Securities
Gujarat Ambuja Exports Limited (GAEL): Buy| LTP: Rs 194| Target: Rs 220-230| Stop Loss: Rs 178| Upside 18%
The stock made a 52-week low at Rs 81.75 on July 31, 2020, and a 52-week high of Rs 197.10 on July 30, 2021. The 200-Day Exponential Moving Average (DEMA) on the daily chart is currently at Rs 145.24.
The stock is trading in higher highs and higher lows sort of the Rising Wedge on the weekly charts, which is considered to be bullish. Apart from this, it has formed a Cup and Handle pattern on the daily charts and has also given a breakout of the same during last week, gained by 5 per cent.
Technical indicators, such as RSI and MACD, also suggest a buy. One can go long in the range of Rs 190-192 level for an upside target of Rs 220-230 levels, with a stop -loss below the Rs 178 level.
NMDC Limited (NMDC): Buy| LTP: Rs 181| Target: Rs 200-205| Stop Loss: Rs 166| Upside 13%
The stock made a 52-week low of Rs 75.60 on September 24, 2020, and a 52-week high of Rs 213.20 on May 12, 2021. The 200 DEMA of the stock on the daily chart is currently at Rs 144.05.
The short-term, medium-term biases are looking positive for the stock as it is trading in higher highs and higher lows on charts. Apart from this, the stock has formed a Bull Flag pattern on weekly charts, which is bullish in nature.
Last week, the stock has given the pattern breakout, along with high volumes, and has also managed to close above the same. Further buying is anticipated from the current levels.
Therefore, one can buy in the Rs 178-180 levels for an upside target of Rs 200-205 levels, with a stop-loss below the Rs 166 levels.
Bharat Dynamics: Buy| LTP: Rs 420| Target: Rs 430-460| Stop loss: Rs 395| Upside 9.5%
The stock is still looking superb on the chart. Positional traders can watch between Rs 420-405, with a stop loss of Rs 395. On the upper side, we are expecting Rs 430-445-460 levels in one month.Disclaimer: The views and investment tips expressed by 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.