Experts advise investors not to trade aggressively unless a convincing trend develops. Investors should keep track of global stock indices.
Sunil Shankar Matkar
April 25, 2022 / 10:19 AM IST
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The stock market remained in the tight grip of bears for yet another volatile week (ended April 22) as the Nifty 50 fell more than 300 points to 17,172, dragged lower by banks, financial services, technology and metal stocks. The US Federal Reserve chief’s hawkish commentary also weakened sentiment.
After dropping to about 16,800 on April 19, the index defended that level and 17,000 in the following days, which could be crucial support levels in the coming sessions. On the upside, key hurdles are expected in the 17,300-17,500 range. Experts said the overall market is expected to be rangebound unless the index shows a convincing trend on either side of this range.
“Though we remain hopeful till the time 17,000-16,800 is defended, the overall positioning is not so convincing. So, the first couple of days of this week remain crucial for the market,” said Sameet Chavan, chief analyst-technical and derivatives at Angel One.
One must keep a close tab on the global markets.
“As far as levels are concerned, 17,300-17,450 should be treated as the immediate hurdle, while support remains at 17,000-16,800,” said Chavan, who advised investors not to trade aggressively till the trend becomes clear.
Also, “unlike previous weeks, we are not left with any convincing idea for individual stocks. One needs to be very selective in the stock-centric approach and should follow strict stop-losses for momentum bets,” Chavan told Moneycontrol.
Here are the top 10 trading ideas by experts for the next 3-4 weeks. Returns are based on April 22 closing prices:
Expert: Subash Gangadharan, Senior Technical and Derivative Analyst at HDFC Securities
Ambuja Cements: Buy | LTP: Rs 374.20 | Stop-Loss: Rs 350 | Target: Rs 420 | Return: 12 percent
After dropping from a high of Rs 443 in September, Ambuja Cements found support at about Rs 274. The stock has found support at about this level in the recent past and it also coincides with the 200-week EMA (exponential moving average).
The stock recently reversed a downtrend by crossing its previous swing high of Rs 315.
Technical indicators are positive as the stock is trading above the 20-day and 50-day SMA (simple moving average). Momentum indicators like the 14-week RSI (relative strength index) too are in rising mode and not overbought, which implies potential for further upside.
With the intermediate technical set-up also looking attractive, we expect the stock to move up to its previous intermediate high in the coming weeks. Buy between Rs 370 and Rs 380, with a stop-loss at Rs 350 and target of Rs 420.
HG Infra Engineering: Buy | LTP: Rs 648 | Stop-Loss: Rs 585 | Target: Rs 780 | Return: 20 percent
HG Infra has bounced back from a low of Rs 482, which corresponds to its 50-week SMA. This indicates that Rs 482 is a strong support level.
Over the last few weeks, the stock has been rising steadily and making higher tops and higher bottoms in the process. On April 21, the stock broke out of its previous swing highs and confirmed a reversal of the recent downtrend.
With the stock trading above key moving averages like the 20-day SMA, the intermediate technical set-up looking positive and momentum indicators like the 14-day RSI in a rising mode and not extremely overbought, this augurs well for the uptrend to continue.
We recommend a buy between Rs 645 and Rs 655, with a stop-loss at Rs 585 and a target of Rs 780.
Hi-Tech Pipes: Buy | LTP: Rs 632.7 | Stop-Loss: Rs 545 | Target: Rs 780 | Return: 23 percent
Hi-Tech Pipes recently bounced back from a low of Rs 495, which corresponds to its 50-week SMA. This indicates that Rs 495 is a strong support level.
Over the past few weeks, the stock has risen steadily and made higher tops and higher bottoms. Last week, the stock broke out of its trading range on the back of above-average volumes.
With the stock trading above key moving averages like the 20-day SMA, the intermediate technical set-up looking positive and momentum readings like the 14-week RSI in rising mode and not overbought, this augurs well for the uptrend to continue.
We recommend a buy between Rs 620 and Rs 630, with a stop-loss at Rs 545 and target of Rs 780.
Expert: Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities
Schneider Electric Infrastructure: Buy | LTP: Rs 147.25 | Stop-Loss: Rs 115 | Target: Rs 170-200 | Return: 15-36 percent
On April 22, the stock absorbed the selling pressure of the falling trendline (supply line) at Rs 137. It is a price breakout on the long-term chart.
During the pandemic time (2020), the stock had registered a double bottom at Rs 58. In 2013, it was at Rs 55. It is a decisive breakout on the daily and weekly charts.
Above Rs 145, it has the biggest hurdles at about Rs 170 and Rs 200. The strategy should be to buy 50 percent at Rs 150 and the remainder at Rs 130 levels. Keep a stop-loss at Rs 115, which is the support of 200-day SMA.
JSW Steel: Sell | LTP: Rs 723.4 | Stop-Loss: Rs 740 | Target: Rs 700-680 | Return: 6-3 percent
The stock has formed a negative divergence on the daily chart (short-term) after hitting the zone of multiple resistance, which is between Rs 770 and Rs 775.
In the past week, the stock was down more than 5 percent and closed below two-week lows. On a daily basis, there was a close below the support of the 20-days SMA, which was at Rs 740 levels.
Below Rs 740, it will decline towards Rs 700 and Rs 680 in the near term. Place the last stop-loss at about Rs 740.
Expert: Ruchit Jain, Lead Reseach at 5paisa.com
NLC India: Buy | LTP: Rs 81 | Stop-Loss: Rs 74 | Target: Rs 92-93 | Return: 15 percent
The stock has consolidated in a broad range for many months and finally prices broke out from the resistance level. The volumes on the breakout were high, which is a positive. Prices recently formed a ‘Higher Top Higher Bottom’ structure and the ‘RSI Smoothened’ oscillator indicates a positive momentum.
Traders can look to buy the stock in the range of Rs 81-80 for potential targets of Rs 92-93 in the next few weeks. The stop-loss for long positions can be placed below the swing low support of Rs 74.
Hindalco Industries: Sell | LTP: Rs 514 | Stop-Loss: Rs 532 | Target: Rs 485 | Return: 5.6 percent
After a sharp rally, prices have reversed in the short-term trend and the stock has been forming a ‘Lower Top Lower Bottom’ structure on the daily chart. The stock has closed below its 20-week EMA and volumes are good, which is a negative sign.
The short-term moving average is below the medium term and points lower, while the RSI oscillator hints at a negative momentum.
Short-term traders can look to short the April Futures contract in the range of Rs 515-518 for a potential target of Rs 485 below April expiry. The stop-loss for short positions should be placed above Rs 532.
Expert: Jatin Gohil, Technical and Derivative Research Analyst at Reliance Securities
Adani Ports: Buy | LTP: Rs 874 | Stop-Loss: Rs 785 | Target: Rs 1,150 | Return: 31 percent
After a stellar up-move (from Rs 251 to Rs 901), the stock is poised for a range breakout (Rs 650-900). This could lead the stock towards its breakout point, which is placed at Rs 1,150.
The key technical indicators are positively poised on the medium-term timeframe chart. In case of a decline, the stock will find support around its intermediate horizontal line.
Long positions can be initiated for a target of Rs 1,150 with a closing based on a stop-loss of Rs 785.
Astral: Buy | LTP: Rs 2,160 | Stop-Loss: Rs 1,920 | Target: Rs 2,525 | Return: 17 percent
Since February 22, 2022, the stock witnessed a gradual recovery and managed to erase partial damage of prior fall (Rs 2,525-1,754). Its 20-day and 50-day EMAs witnessed a bullish cross-over.
Major technical indicators are in favour of bulls on short-term timeframe chart. The stock has potential to move towards Rs 2,430 initially and Rs 2,525 subsequently.
On the lower side, the stock will find strong support at its mid-March low of Rs 1,920. Thus, long position can be initiated for the target of Rs 2,525 with a closing based stop-loss of Rs 1,920.
Navin Fluorine International: Buy | LTP: Rs 4,031 | Stop-Loss: Rs 3,754 | Target: Rs 4,625 | Return: 15 percent
The stock tested its 38.2 percent Fibonacci Retracement level of prior up-move (Rs 3,363-4,173) and poised for a breakout. This could take the stock towards Rs 4,315 initially and Rs 4,625 subsequently.
Above mentioned levels coincides with its 61.8 percent and 100 percent Fibonacci Extension levels of prior up-move, respectively.
In case of any decline, its 200-day SMA will work as a key reversal point, which is placed at Rs 3,754. Thus, long position can be initiated for the target of Rs 4,625 with a closing based stop-loss of Rs 3,754.
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.
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