Experts said trades could continue to be rangebound in the coming days and if the Nifty 50 closes decisively above 18,000-18,100, then it may rally towards record high levels.
Sunil Shankar Matkar
November 08, 2021 / 10:50 AM IST
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The stock markets got off to a positive start for Samvat 2078 on November 4 and registered gains of more than 1 percent last week after weakness in the previous two weeks, taking the benchmark Nifty 50 above 17,900. But overall, it has been rangebound trade for the markets.
Technically, the Nifty 50 formed a bullish candle that resembles an Inside Bar pattern formation on the weekly charts and a bearish candle formation that resembles the Doji pattern on the daily charts on November 4.
Experts said rangebound trade could continue in the coming days and if the index closes decisively above 18,000-18,100, then there may be a rally towards record high levels.
“Traders are advised not to carry aggressive bets on the long side as long as we remain below 18,000-18,100 on a closing basis. On the flipside, we may see this corrective move extending towards 17,450 first and if things worsen, then the possibility of sliding towards 17,200-17,000 cannot be ruled out,” said Sameet Chavan, chief analyst-technical and derivatives, at Angel One.
He said the current week will be quite crucial for the markets and may dictate the near-term direction.
Yesha Shah, head of equity research at Samco Securities, said the index continues to trade under pressure and is likely to do so as long as it remains below 18,000, which is the immediate resistance level.
“A break below 17,600 may trigger a retest of 17,350, which is the next crucial support. We maintain a bearish bias on the markets in the short term,” she said.
Here are 10 trading ideas by experts for the next 3-5 weeks. Returns are based on November 4 closing prices:
Mehul Kothari, AVP – technical research at Anand Rathi Shares and Stock Brokers
Eicher Motors: Buy | LTP: Rs 2,661.6 | Stop Loss: Rs 2,470 | Target: Rs 3,000 | Return: 12.7 percent
Of late, the stock has been under pressure and has corrected from a peak of Rs 3,000 towards the Rs 2,500 mark. On the daily chart, we are witnessing a double-bottom kind of formation near the swing low of Rs 2,470.
In addition, the recent price action has resulted in a ‘Bullish Engulfing’ candlestick pattern on the weekly scale. The broader trend is still strong and thus we expect a fresh upside from here on in Eicher Motors.
Traders are advised to buy the stock only on dips between Rs 2,660 and Rs 2,620, with a stop-loss of Rs 2,470 for an upside potential target of Rs 3,000 in the coming 3-5 weeks.
IDFC First Bank: Buy | LTP: Rs 51.10 | Stop Loss: Rs 45 | Target: Rs 60 | Return: 17.4 percent
After a sharp fall from Rs 69, the stock took a U-turn from the support of Rs 40, which was the placement of the 200 EMA (exponential moving average). After that, the stock confirmed a falling trend line breakout above the Rs 50 mark.
The stock has a placement of 200-day EMA at Rs 52 and above that we expect a sharp upside in the counter.
Traders are advised to buy the stock near Rs 50 with a stop-loss of Rs 45 for an upside potential target of Rs 60 in the coming 3-5 weeks.
PC Jeweller: Buy | LTP: Rs 28 | Stop Loss: Rs 26 | Target: Rs 35 | Return: 25 percent
PC Jeweller recently confirmed a range breakout above Rs 27 and then rallied towards Rs 31. Due to the ongoing profit booking in the market, the stock has again retested the breakout zone.
At this point, the risk-reward looks lucrative to go long for a trader. Traders can buy the stock above Rs 29 with a stop-loss of Rs 26 for an upside target of Rs 35 in the coming 3-5 weeks.
Shrikant Chouhan, head of equity research (retail) at Kotak Securities
SBI Cards & Payment Services: Buy | LTP: Rs 1,120.60 | Stop Loss: Rs 1,020 | Target: Rs 1,250 | Return: 11.5 percent
The stock is forming an ascending triangle on a weekly basis. After hitting the lower boundary of the trading range, the stock is on the verge of crossing the upward boundary, which is around Rs 1,180.
The combination of short-term simple moving averages is exhibiting volatility, suggesting a mixed trend in the short term.
The strategy should be to buy at current and more on dips at Rs 1,070. Keep a stop-loss at Rs 1,020 for a target of Rs 1,250.
Titan Company: Buy | LTP: Rs 2,431.75 | Stop Loss: Rs 2,330 | Target: Rs 2,700 | Return: 11 percent
It is forming a rounding bottom pattern on the intraday charts after witnessing profit taking at Rs 2,700 levels. As per SMA (simple moving average) averages, it shows the price is stabilising between 10- and 20-day SMA.
Above the level of Rs 2,480, the chances of retesting Rs 2,650-2,700 would brighten. Buy in tranches and keep a stop-loss at Rs 2,330.
Mahindra & Mahindra: Buy | LTP: Rs 872.85 | Stop Loss: Rs 840 | Target: Rs 940 | Return: 7.7 percent
It has displayed a spectacular rally from Rs 729 levels and hit Rs 971 in only 16 trading sessions. Two days ago, it was at Rs 843, which is a 50 percent retracement of the rally.
On a daily basis, the stock has formed a reversal formation after hitting the support area. We should be buyers in M&M at current and more on dips. Keep a stop-loss at Rs 840 for a target of Rs 940.
Karan Pai, technical analyst at GEPL Capital
Sobha: Buy | LTP: Rs 950.60 | Stop Loss: Rs 850 | Target: Rs 1,127 | Return: 18.6 percent
Sobha was witnessing choppy moves for the past couple of weeks. The stock has been forming a ‘higher high, higher low’ pattern since October 29.
This up move was also backed by good volumes, indicating participation in the up move. On November 3, the stock tested a fresh 52-week high and managed to sustain at higher levels.
On the indicator front, the Bollinger bands on the daily charts can be seen expanding, indicating increasing volatility as prices move higher.
As per the price pattern, we feel that the stock price is gaining momentum and moving higher toward a fresh 52-week high of Rs 1,050 and eventually towards Rs 1,127.
Investors can accumulate Sobha and hold with a target of Rs 1,050 and Rs 1,127 and maintain a stop-loss of Rs 850 on a closing basis.
Larsen & Toubro: Buy | LTP: Rs 1,908.95 | Stop Loss: Rs 1,730 | Target: Rs 2,258 | Return: 18.3 percent
Larsen & Toubro, on the higher timeframe, can be seen drifting higher and testing a fresh 52-week high slowly but steadily.
The price can be seen riding the upper Bollinger bands on the weekly time frame. On the daily chart, we can see that the prices gained bullish momentum and moved higher after about two weeks of consolidation. This was backed by good volume build-up, indicating participation in the up move.
The RSI (relative strength index) seems to have witnessed a range shift and has been placed above the 50-mark for a long time. It can be seen moving towards the overbought level, indicating increasing bullish momentum in the price. We expect the stock to move higher towards Rs 2,056-2,258.
The stop-loss for this trade setup would be Rs 1,730 on a closing basis.
Jammu & Kashmir Bank: Buy | LTP: Rs 45.25 | Stop Loss: Rs 38 | Target: Rs 53.35 | Return: 18 percent
On the medium- to long-term charts, J&K Bank can be seen coming out of a prolonged consolidation. On the shorter timeframe charts, we can see prices forming a ‘higher high, higher low’ pattern and moving higher with a volume build-up, indicating participation in the up-move.
The RSI on the weekly charts can be seen placed above the 50 mark since May 2021. It can be seen moving higher towards the overbought level, indicating an increasing bullish momentum in prices.
We expect the bullish momentum to accelerate if the price goes higher than Rs 46.35, after which we may see the stock move towards Rs 53.35 followed by Rs 59.25.
The stop-loss for this trade setup would be Rs 38 on a closing basis.
Vijay Dhanotiya, lead technical research at CapitalVia Global Research
Delta Corp: Buy | LTP: Rs 282.10 | Stop Loss: Rs 240 | Target: Rs 350 | Return: 24.1 percent
A hammer candle formation in the daily chart near the support line indicates bullish sentiment in the stock. A bullish engulfing candle formation in the weekly chart also confirms a buy.
We recommend a buy in Delta Corp above Rs 275 with a target of Rs 350 and stop-loss of Rs 240.
Disclaimer: 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 making any investment decisions.
