The market ended last week by adding another 1.60 percent to the previous weekly close.
Although the bears tried to take the charge, all attempts turned unsuccessful. Despite having some fatigue around highs, the market was not willing to surrender and hence, slipped into a consolidation mode.
Now, taking a glance at all timeframe charts, we are unable to find any key observation. Hence, 15,300 – 15,000 will be seen as a crucial range and a breakout on either side should ideally dictate the direction.
But in case of an upside breakout, we would avoid aggressive participation, because as of now, we do not see Nifty going beyond 15,450 – 15,600 in the same leg of the rally.
So, we would continue to advise booking profits if Nifty enters this mentioned zone. On the flip side, the action below 15,000 would be an interesting one to participate in.
In this scenario, a healthy profit-booking towards 14,600 – 14,400 cannot be ruled out.
The next couple of sessions would be quite crucial and we should be able to get an idea of where the market is heading in the near-term.
Last week, there was only stock-specific activity seen in the market, but honestly, nothing was convincing enough.
So, the pragmatic strategy would be to wait for some sort of trend deciding action and then one should be looking to place aggressive bets.
Here’s one buy and one sell call for the next 2-3 weeks:
Muthoot Finance | Buy | LTP: Rs 1,315 | Target price: Rs 1,445 | Stop loss: Rs 1,210 | Upside: 10%
This gold financing giant has been one of the rank outperformers over the past few years.
It’s very rare to see any kind of significant correction in this counter and even if it happens, investors just pounce on it to add it to their portfolios.
After a smart V-shaped recovery from the March fiasco, the stock prices went into a consolidation mode and until last week, the range was very much confined.
With this week’s smart rally, the daily chart now exhibits a ‘range breakout’ and since the move is accompanied by decent volumes, we expect the rally to extend in the coming days.
Traders are advised to buy on decline towards Rs 1,290–1,270 for a target of Rs 1,445 in the coming weeks.
Bharti Airtel | Sell | LTP: Rs 586.25 | Target price: Rs 563 | Stop loss: Rs 604 | Downside: 4%
This stock managed to find strong support around Rs 400 and the recovery mode started in late October.
This recovery eventually turned into a strong upward rally to post new highs beyond Rs 600 after its recent quarterly numbers.
Due to the lack of follow-up buying, the momentum fizzled out and hence, the stock prices vacillated in a small range throughout last week.
If we observe the intraday timeframe chart, we can see a breakdown from the upward sloping trend line around Rs 588.
Although the major trend remains strongly bullish, we are advising a contradictory sell in this stock purely as a trading punt.
(The author is Chief Technical & Derivatives Analyst at Angel Broking)
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