Technical experts advise short-term traders to start taking some money off the table if the Nifty reaches 16,400-16,500 because prices are moving away from some key averages on the quarterly charts
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It was a fast and furious rally on D-Street as the Nifty 50 surpassed a crucial resistance level at about 16,000 to hit a fresh high of 16,349 on August 5, gaining about 3 percent, or 475 points, in the week ended August 6.
The S&P BSE Sensex also made similar gains, but the small and midcap indices underperformed the benchmark indices. The S&P BSE MidCap Index and the S&P BSE SmallCap Index rose less than 1 percent.
With the Nifty 50 finally breaking above the 16,000 level for the first time following two months of consolidation within a range of 15,450-15,950 and approaching 16,400, technical experts advise investors to lighten their positions.
“We may see the Nifty reaching or even moving beyond the next milestones of 16,400-16500. Although the upward trend has just resumed after a long consolidation, we would advise short-term traders to start lightening up positions if the Nifty reaches the mentioned levels in the coming days,” said Sameet Chavan, chief analyst-technical and derivatives, at Angel Broking. “Prices have now started moving far away from some key moving averages on the quarterly timeframe charts. We are not at all advising to go against the current trend but at least taking some money off the table on existing positions is always a good ploy.”
Chavan added that 16,200 and 16,000 are likely to be considered as key support levels for the benchmark index, whereas for the Nifty Bank index, the similar zone is at about 35,500-35,200.
Momentum traders are advised to take one step at a time and follow proper risk management.
Here are 10 trading ideas by experts for the next 3-4 weeks:
Rajesh Palviya, VP-technical & derivative research, Axis Securities
Larsen & Toubro Infotech: Buy| LTP: Rs 4,766| Buy Range Rs 4,700-4,606| Target: Rs 5,000-5,130| Stop Loss: Rs 4,450| Upside 5-7%
On the weekly chart, the stock has witnessed a 6-8 month “consolidation range” breakout at the Rs 4,500 level. It is well-placed above its 20 and 50-day SMAs, which reconfirm the bullish sentiment. Rising volumes at the breakout zone signalled increased participation on August 6.
The stock is in a strong uptrend across all timeframes, forming a series of higher tops and bottoms.
The daily and weekly relative strength index (RSI) is in a bullish mode, which supports rising strength as well as momentum. The analysis indicates an upside to Rs 5,000-5,130. The holding period is three to four weeks.
Adani Enterprises: Buy| LTP: Rs 1,536| Buy Range: Rs 1,500-1,470| Target: Rs 1,600-1,650| Stop Loss: Rs 1,422| Upside 4-7%
On the daily chart, the stock has witnessed multiple resistance breakouts at about Rs 1,470, which signals a strong comeback of bulls.
Huge volumes on the breakout signal increased participation near the breakout zone. The stock is in a strong uptrend as it continues to form a series of higher tops and higher bottoms on the weekly and monthly charts.
It is well-placed above its 20-, 50-, and 100-day SMAs, which reconfirm the bullish trends. The daily and weekly RSI is placed above the 50 mark, which supports rising strength. The analysis indicates an upside to Rs 1,600-1,650. The holding period is three to four weeks.
Solara Active Pharma Sciences: Buy| LTP: Rs 1,777| Target: Rs 1,900-1,985| Stop Loss: Rs 1,643| Upside 7-11%
On the weekly chart, the stock has witnessed a “flag” formation breakout at the Rs 1,750 level on a closing basis, along with rising volumes.
On the daily and weekly charts, the stock continues to scale upward, forming higher tops and higher bottoms, indicating a sustained uptrend.
The stock is well-placed above its 20-, 50- and 100-day SMAs, which reconfirm upside momentum. The daily and weekly RSI is in a bullish mode along with positive crossover, which supports rising strength.
The analysis indicates an upside to Rs 1,900-1,985. The holding period is three to four weeks.
Piramal Enterprises: Buy| LTP: Rs 2,664| Target: Rs 2,775-2,850| Stop Loss: Rs 2,445| Upside 4-7%
On the weekly chart, the stock has witnessed a “flag” formation breakout at the Rs 2,400 level on a closing basis along with rising volumes.
On the weekly and monthly charts, the stock continues to form a series of higher tops and higher bottoms, which signal a strong uptrend.
Buying was observed from its 20-day SMA (Rs 2,308) support zone, which remains a crucial level to watch for. The daily and weekly Bollinger Band buy signal also reconfirmed rising momentum.
The daily and weekly RSI is in a bullish mode along with a positive crossover, which support rising strength. The analysis indicates an upside to Rs 2,775-2,850 levels.
Gaurav Garg, head of research at CapitalVia Global Research
Axis Bank: Buy| Trigger Price: Rs 760| Target: Rs 800| Stop Loss: Rs 738| Upside 5.26%
The stock has witnessed a reversal from its support level and further strength might be gained if it sustains above Rs 760. Axis Bank might outperform its private bank peers in the coming weeks. The crossover of its short and medium-term averages on the daily charts with strong volumes show signs of further upside.
Hero MotoCorp: Buy| Trigger Price: Rs 2,852| Target: Rs 2,950| Stop Loss: Rs 2,799| Upside 3.43%
The stock is witnessing a bounce from an important support level. Further, if the stock is able to sustain above Rs 2,852, which is the immediate resistance level, it might give a strong bullish breakout. The stock is sustaining above its important moving averages.
Happiest Mind Technologies: Buy| Trigger Price: Rs 1,430| Target: Rs 1,485| Stop Loss: Rs 1,384| Upside 3.84%
The stock is forming a bullish flag pattern and if it sustains above Rs 1,430, it will bring a positive momentum.
Volume addition has been significant in recent days. The stock is showing strong momentum and might stretch towards Rs 1,500 levels in the coming week.
Sameet Chavan, chief analyst-technical and derivatives, Angel Broking
HCL Technologies: Buy| LTP: Rs 1,050| Target: Rs 1,125| Stop Loss: Rs 1,004| Upside 7%
Overall, IT conglomerates had a steady week and are certainly among the major contributors in lifting the benchmark to record highs. Since the broader market cooled off a bit towards the fag end, it has become difficult to find potential movers in the mid- and small-cap space for the forthcoming week. Hence, the focus on a safe, larger name.
HCL Tech’s technical positioning is quite encouraging as it is knocking at the doors of its previous record high. A small push in the upward direction from here on will confirm its entry into uncharted territory.
Considering the positive posture, we recommend buying for a short-term target of Rs 1,125. The stop-loss can be placed at Rs 1,004.
Amara Raja Batteries: Buy| LTP: Rs 733| Target: Rs 772| Stop Loss: Rs 710| Upside 5%
This is one of the worst-performing stocks in the auto and auto ancillary space, which is clearly visible when we look at its year-to-date performance.
After shedding more than 20 percent in seven months, the fall seems to have been arrested around its cluster of supports on the higher degree timeframe charts. On the weekly chart, we can see the completion of a 50 percent retracement of the gigantic rally from March 2020 lows to January 2021 highs.
In addition, we can see a formation of ‘bullish hammer’ pattern precisely at this rock-solid support. The pattern has already been activated and hence, momentum traders are advised to buy for a short-term price target of Rs 772. The stop-loss needs to be maintained at Rs 710.
SMC Global Securities
Federal Bank: Buy| LTP: Rs 87| Target: Rs 100-103| Stop Loss: Rs 81| Upside 15%
The stock had dropped to a 52-week low of Rs 45.35 on September 25, 2020, and climbed to a 52-week high of Rs 92.50 on March 4, 2021.
The 200-day exponential moving average of the stock on the daily chart is currently at Rs 77.90. The short-term and medium-term biases are positive for the stock as it is trading in higher highs and higher lows on the charts.
Apart from this, the stock is forming an “inverse head and shoulder” pattern on the weekly charts, which is bullish in nature. Over the past few weeks, the stock has been consolidating with a positive bias and is on the verge of a breakout.
So follow-up buying may continue in the coming days. Therefore, one can buy in the range of Rs 85-86 levels for an upside target of Rs 100-103 with a stop-loss below Rs 81.
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.
