The market had started the week ended September 23 on a mild note, taking cues from the weak global markets, but the dip augurs well for the bulls initially, and the Nifty has seen two consecutive days of positive closure.
As the week progressed, markets seemed tentative at the higher grounds, and the weakness in the global markets eventually dragged the indices lower by the weekend. The benchmark index witnessed a correction consecutively for the second week and ended the session a tad above 17,300 with a cut of over 1.16 percent to the previous week’s close.
Technically speaking, the last session of correction has dampened the overall sentiments as the significant support of the unfilled gap got breached decisively, implying strong momentum in the sell-off. The weakness in the global markets and the upcoming key domestic data have put a sense of tentativeness among the market participants.
As we have witnessed a decisive breach below the major support zone in Nifty, one should not rule out the possibility of it testing the immediate swing low of 17,150 odd zone, while the sacrosanct support lies at the psychological mark of 17,000. On the flip side, a series of resistances could be seen starting from 17,500 to 17,800 in the comparable period.
Considering the recent price action, traders are advised not to carry aggressive overnight bets for a while and should adapt the strategy to follow one step at a time and respect levels on either side.
The unfavourable global scenario was one of the major catalysts for the fall in the week; hence, one should stay abreast with global developments and the upcoming key domestic macro data. Also, one can continue to focus on individual stocks as the thematic moves are still playing out well in the market.
Here are two buy calls for the next 2-3 weeks:
Marico: Buy | LTP: Rs 542.95 | Stop-Loss: Rs 512 | Target: Rs 582 | Return: 7 percent
Marico has been in a secular uptrend post consolidating above 200 days exponential moving average (DEMA) and is currently hovering well above all its major exponential moving averages on the daily chart.
The stock has gained traction in terms of volume from the past couple of trading sessions and has recently seen a breakout from the stiff resistance zone of Rs 530 odd levels.
Also, on the technical front, the primary indicators are in the bullish trajectory, favouring the continuation of the uptrend. Hence, we recommend buying the stock for a trading target of Rs 582. The stop-loss to be placed at Rs 512.
Sun Pharmaceutical Industries: Buy | LTP: Rs 921.10 | Stop-Loss: Rs 874 | Target: Rs 992 | Return: 7.7 percent
Sun Pharma has seen a strong momentum from the recent swing low of Rs 856 levels and is currently hovering well above all its major exponential moving averages on the daily chart.
Meantime, the stock has reversed from the mean of the weekly Bollinger and is settled on a positive note. Even on the technical front, the 14-period RSI (relative strength index) has been placed in the comfort zone post the positive crossover, which suggests the momentum to continue in the near term.
Hence, we recommend buying the stock for a trading target of Rs 992. The stop-loss to be placed at Rs 874.
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