Experts expect some consolidation in the key indices and adjustments to continue in individual stocks. For the week ahead, in case of a consolidation, one should focus on stock-specific moves, which will provide excellent trading opportunities, they said.
Sunil Shankar Matkar
March 14, 2022 / 10:23 AM IST
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India’s stock market snapped a four-week losing streak and clocked a more than 2 percent gain in the week ended March 11 after global equity counterparts bounced back, commodity prices fell and the BJP won four of the five state assembly elections.
It was an action-packed week for the market as the Nifty 50 faced resistance about the 20-day moving average (16,767) as well as the 200-day exponential moving average (16,693) and failed to end above them after touching a seven-month low of 15,671 during the week.
If the index closes decisively above 16,750-16,800, it could head towards 17,000 and beyond, which can be an indication that 15,671, the low touched last week, could act as a bottom. On the flip side, 16,450-16,200 could be support levels for the index, experts said.
The Nifty 50 gained 385 points, or 2.37 percent, to close at 16,630.45 and formed a Bullish Engulfing pattern on the weekly charts, which is a positive sign for the market.
“16,750-16,800 remains a key hurdle and any sustainable move above this would confirm the March 8 low as a bottom. On the flipside, 16,450 followed by 16,200 are the immediate supports,” said Sameet Chavan, chief analyst-technical and derivatives, at Angel One.
He expects some consolidation in the key indices and adjustments to continue in individual stocks. For the week ahead, in case of a consolidation, one should focus on stock-specific moves, which will provide excellent trading opportunities, Chavan said.
According to Santosh Meena, head of research at Swastika Investmart, the bulls have to take the Nifty above the 17,000 level to come back aggressively in the game otherwise there is a risk that the bears may once again become active.
Here are the top 10 trading ideas by experts for the next 3-4 weeks. Returns are based on March 11 closing prices:
Nagaraj Shetti, technical research analyst at HDFC Securities
Laurus Labs: Buy | LTP: Rs 578 | Stop-Loss: Rs 535 | Target: Rs 640 | Return: 11 percent
After showing a gradual rise as per the higher highs and higher lows in the past few months, Laurus Labs witnessed a sharp upside breakout. The stock price moved above the crucial resistance of the consolidation area at Rs 557 levels on March 11 and closed higher. There is a higher possibility of further extension in the upside momentum in the coming week.
Volumes had started to expand during the upside breakout in the stock price and the weekly 14 period relative strength index (RSI) shows a positive indication. One may expect further strengthening of the upside momentum in the stock price.
Buying in Laurus Labs can be initiated at Rs 578, add more on dips down to Rs 555, and wait for the upside target of Rs 640 in the next 3-4 weeks. One can place a stop-loss of Rs 535.
Prism Johnson: Buy | LTP: Rs 126 | Stop-Loss: Rs 117 | Target: Rs 140 | Return: 11 percent
The sharp downtrend in Prism Johnson over the past seven weeks seems to have ended after it showed a decisive upside breakout recently. We observed the formation of a Bullish Engulfing pattern, as per the weekly timeframe chart, which signals the formation of an important bottom reversal for the stock price at the Rs 110 level.
The weekly candle pattern indicates an engulfing of the past three weeks’ range on the upside in one week. Volumes expanded during the upside breakout on March 11 and the weekly 14 period RSI shows positive indication.
One may look to buy Prism Johnson at Rs 126, add more on dips down to Rs 121 and wait for the upside target of Rs 140 in the next 3-4 weeks. One can place a stop-loss of Rs 117.
Mahindra Logistics: Buy | LTP: Rs 430 | Stop-Loss: Rs 402 | Target: Rs 475 | Return: 10.4 percent
After a sharp weakness in the past month, the stock price shifted into a broader range movement over the past few weeks. Currently, the stock price is placed at a crucial lower support level of Rs 405.
The formation of a high wave-type weekly candle pattern and the lower shadow of the last three weekly candles signal chances of buying interest emerging from the lows. The weekly 14 period RSI has reached the oversold region and suggests chances of further strengthening of the upside momentum in the stock.
One may look to buy Mahindra Logistics at Rs 430, add more on dips down to Rs 415 and wait for the upside target of Rs 475 in the next 3-4 weeks. One can place a stop-loss of Rs 402.
Ruchit Jain, lead research at 5paisa.com
Inox Leisure: Buy | LTP: Rs 424.65 | Stop-Loss: Rs 412 | Target: Rs 460 | 8 percent
The price action in the past few months has led to formation of a ‘Cup and Handle’ pattern on the daily chart. This continuation pattern is formed amid a broader uptrend and hence a breakout from this neckline should lead to resumption of a positive momentum.
A move above Rs 430 will lead to a confirmation and hence, traders should look to buy the stock on breakout.
Traders can look to trade with a positive bias and buy the stock above Rs 430 for a potential target of Rs 460 in the near term. One can then place a stop-loss below Rs 412 on long positions.
Astha Jain, senior research analyst at Hem Securities
Maithan Alloys: Buy | LTP: Rs 1,285 | Stop-Loss: Rs 1,030 | Target: Rs 1,450-1,600 | Return: 13-25 percent
After making a high of Rs 1,255 in August 2021, the stock fell to Rs 909 in the same month. Also, on the weekly charts, the moving average convergence divergence (MACD) rose above its signal line, which qualifies a bullish trend in the stock.
The stock has come out of consolidation with a strong base formation at about the Rs 900 level. We believe the stock is poised for a further upside rally with a medium-term target of Rs 1,450-1,600.
Gufic Biosciences: Buy | LTP: Rs 230.40 | Stop-Loss: Rs 190 | Target: Rs 250-270 | Return: 9-17 percent
After making a high of Rs 270 in January 2022, the stock fell and touched Rs 192 in February.
On the weekly charts, the stock has successfully closed above all major moving averages with a Bullish Engulfing pattern formation.
We believe the stock is poised for an upside rally with a medium-term target of Rs 250-270.
Shrikant Chouhan, head of equity research (retail) at Kotak Securities
Tata Steel: Buy | LTP: Rs 1,302 | Stop-Loss: Rs 1,200 | Target: Rs 1,450-1,500 | Return: 11-15 percent
As per the weekly chart, Tata Steel is set to move higher with a strong bullish reversal formation. The metal sector is also doing well.
A strong recovery after forming several bottoms near Rs 1,050 is showing us that the stock may reach the target of Rs 1,500 in the coming days. Fifty percent should be bought at Rs 1,300 and the rest at Rs 1,225. Stop-loss should be on a closing basis at Rs 1,200.
Jigar S Patel, senior manager – equity research at Anand Rathi Shares & Stock Brokers
Wipro: Buy | LTP: Rs 586.20 | Stop-Loss: Rs 530 | Target: Rs 640 | Return: 9 percent
Wipro has corrected almost 28 percent in the recent past and was placed well below 200 DMA (day moving average). Having said that, it has formed a Bullish Gartley pattern on the daily chart, with a triple bottom near the PRZ (potential reversal zone) along with a bullish divergence on RSI 14 period. In this scenario, Wipro looks like a lucrative bet.
TCS: Buy | LTP: Rs 3,599.15 | Stop-Loss: Rs 3,450 | Target: Rs 3,950 | Return: 10 percent
TCS has the same setup as Wipro – the only difference is that in TCS, there are Dual Harmonic patterns (Special Gartley and Butterfly) formed with a similar potential reversal zone of Rs 3,500-3,550.
The 14 period daily RSI has shown impulsive behaviour followed by a bullish green candlestick on March 8, which is similar to the Marubozu pattern.
Grasim Industries: Buy | LTP: Rs 1,566.25 | Stop-Loss: Rs 1,450 | Target: Rs 1,775 | Return: 13 percent
Grasim has corrected almost 27 percent from a peak of Rs 1,929.80 on January 18 and is currently below its 200 DMA.
At the current juncture, Grasim has respected the potential reversal zone (i.e. Rs 1,500-1,520) of a bullish Butterfly pattern. Multiple Doji candles have formed near the PRZ along with the MACD about to make a positive crossover, which is a sign of an early reversal.
Disclaimer: The views and investment tips expressed by investment 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.
