MCX India has witnessed a breakout of a bullish double bottom pattern formation on the longer time frame while on the daily chart; it has given a breakout of a bullish Inverse Head & Shoulder pattern with huge volume.
Sunil Shankar Matkar
October 27, 2022 / 11:26 AM IST
Representative image
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The market had a strong start to the Samvat 2079 as the benchmark indices gained nearly a percent each on October 24, the Muhurat trading session, tracking the positive mood in global counterparts. It was followed by some profit-taking on Tuesday.
Overall, the current week recorded half-a-percent gains in addition to more than 2 percent gains clocked by the market in the previous week. The Nifty50 has seen a gradual up move in last two weeks, climbing up to 17,800, from 16,950 level on October 11. Now the index moved closer the crucial resistance area of 17,750-17,900 levels, which if it decisively surpasses in coming sessions then 18,000 can’t be ruled out soon with support zone of 17,500-17,400, experts said.
“Since last couple of months, we were hopeful and expected market to recover from lower levels. This is very much on expected lines, markets did move higher and now we are within the touching distance of the 18,000 mark,” Sameet Chavan, Chief Analyst of Technical and Derivatives at Angel One said.
Looking at the broader time frame charts, he said he would not be surprised to see Nifty surpassing this hurdle (18,00) soon to retest the record highs of 18,600.
“Overall placement of the banking space is adding to the conviction level and once we see other heavyweight starts participating, the history is clearly in the making,” he said.
Overall the Nifty has done well in the October series, gaining around 5 percent so far.
Let’s take a look at the top 10 trading ideas by experts for the next three-four weeks. Returns are based on the October 25 closing prices:
Expert: Jatin Gohil, Technical and Derivative Research Analyst at Reliance Securities
Hindustan Unilever: Buy | LTP: Rs 2,505 | Stop-Loss: Rs 2,537 | Target: Rs 2,859 | Return: 14 percent
The stock has formed a bullish reversal pattern-Morning Doji Star- around its upward sloping 20-week EMA (exponential moving average) and poised for a fresh up-move. This could lead the stock towards its life-time-high of Rs 2,859 in next couple of weeks.
The key technical indicators are in favour of the bulls on short-term timeframe chart. Since June 24, the stock remained above its 20-week EMA. As per the current set-up, undergoing positive momentum may continue, which could help the stock to move higher.
In case of any decline, the stock will respect its 20-week EMA, which is currently placed at Rs 2,537.
UltraTech Cement: Buy | LTP: Rs 6,415.7 | Stop-Loss: Rs 6,005 | Target: Rs 7,050 | Return: 10 percent
The stock oscillated between its 38.2 percent and 50 percent Fibonacci Retracement levels of prior up-move (Rs 5,157-7,029), which are placed at Rs 6,310 and Rs 6,090, respectively and poised for a breakout. This could take the stock towards its prior point of polarity, which is placed at around Rs 7,050.
The key technical indicators are positively poised on medium-term as well as short-term timeframe charts.
Hence, probable breakout cannot be ruled out. On the lower side, the stock will find support around the lowest level of September 2022, which is placed at Rs 6,005.
IRCTC: Buy | LTP: Rs 740 | Stop-Loss: Rs 685 | Target: Rs 841 | Stop Loss: Rs 685 | Return: 7.5 percent
The stock remained sideways post a descending channel breakout and poised for a fresh up-move. This could lead the stock towards its highest level of April 2022, which is placed at Rs 841.
Since August 19, 2022, the stock respected its 20-week and 50-week EMAs, as it remained well above that moving averages. Its momentum indicators and oscillators are in favour of the bulls, which will support a strong rise from current juncture.
In case of any decline, the stock will find support around its 50-week EMA, which is placed at Rs 685.
Expert: Jigar S Patel, Senior Manager – Equity Research at Anand Rathi
Pfizer: Buy | LTP: Rs 4,349 | Stop-Loss: Rs 4,100 | Target: Rs 4,800 | Return: 10 percent
Pfizer has witnessed a free fall from September 2021 till June 2022 which resulted in a 31 percent correction. Since then the stock has been consolidating between Rs 4,000 – 4,200 along with making higher highs and higher lows and it has made a solid base near Rs 4,200 levels.
On the indicator front weekly, RSI (relative strength index) has shown bullish divergence which is adding more confirmation for further upside in the counter.
One can hold (if already bought) and add (if considering fresh buy) at the current market price. The upside is likely till Rs 4,800 with credible support at Rs 4,100.
Gujarat Gas: Buy | LTP: Rs 517 | Stop-Loss: Rs 460 | Target: Rs 585 | Return: 13 percent
Gujarat Gas has corrected almost 49 percent from its peak of Rs 780 which was registered on August 2, 2021. On a weekly scale, it has taken support near Rs 420-430 levels.
Recently on a weekly scale, the stock confirmed a bullish Inverted Hammer candlestick pattern followed by a bullish Piercing pattern exactly at the mentioned support levels and that is adding more confirmation of further upside in the counter.
In addition to the above-discussed technical reasoning, weekly RSI has displayed an impulsive structure near the oversold zone which is adding more strength to the said counter. Thus we advise traders to buy the stock for an upside target of Rs 585 with a stop-loss of Rs 465.
HCL Technologies: Buy | LTP: Rs 1,026.5 | Stop-Loss: Rs 960 | Target: Rs 1,150 | Return: 12 percent
The free fall started from mid-January 2022 to July 2022 which resulted in a 34 percent decline in price. On a weekly scale, the counter has formed a bullish Bat pattern with a potential reversal zone of Rs 920-940 along with double bottom near mentioned potential reversal zone which is adding more confirmation for early reversal in the counter.
Recently the said counter gave a clean breakout from its previous trading range of Rs 860-950 and closed near Rs 1,027 mark on a weekly closing basis which shows the strength in the counter.
On the indicator front, the weekly RSI (relative strength index) has formed an impulsive structure near the oversold zone along with the MACD (moving average convergence and divergence) made bullish cross (weekly scale) which further confirms the upside in the counter.
One can buy in small tranches at current levels and buy another tranche at around Rs 985-990 levels (if tested). The upside is expected till Rs 1,150 and support is likely around Rs 960.
Expert: Ruchit Jain, Lead Research at 5paisa.com
Rallis India: Buy | LTP: Rs 232.65 | Stop-Loss: Rs 214 | Target: Rs 265 | Return: 14 percent
After the recent upmove, the stock has seen some correction in last one month and has retraced the previous upmove by 61.8 percent support. From this support zone, the stock has resumed its upmove and is now on verge of breakout from a falling trendline resistance.
The volumes in last couple of sessions were quite good indicating buying interest in the counter.
Traders can buy the stock around current market price of Rs 233-230 for potential short term target around Rs 265. The stop-loss on short positions should be placed below Rs 214.
Kalpataru Power Transmission: Buy | LTP: Rs 457.7 | Stop-Loss: Rs 430 | Target: Rs 500 | Return: 9 percent
The stock had recently given a breakout from the consolidation phase and post the breakout, the prices are moving gradually higher with good volumes. The ‘Higher Top Higher Bottom’ structure indicates an uptrend while the RSI oscillator is hinting at a positive movement.
Hence, traders can buy the stock in the range of Rs 455-450 for potential short term target around Rs 500. The stop-loss on positions should be placed below Rs 430.
Expert: Pravesh Gour, Senior Technical Analyst at Swastika Investmart
MCX: Buy | LTP: Rs 1,495 | Stop-Loss: Rs 1,350| Target: Rs 1,764| Return: 18 percent
The counter has witnessed a breakout of a bullish double bottom pattern formation on the longer time frame while on the daily chart; it has given a breakout of a bullish Inverse Head & Shoulder pattern with huge volume. The overall structure of the counter is very lucrative as it is trading above all its important moving averages.
On the upper side, Rs 1,520 is an immediate resistance; above this, we can expect a big move till Rs 1,800+ in the shorter time frame while on the downside Rs 1,400-1,350 is the demand zone for any correction.
The momentum indicator RSI (relative strength index) is also positively poised whereas MACD (moving average convergence divergence) is supporting the current strength.
Ramky Infrastructure: Buy | LTP: Rs 267 | Stop-Loss: Rs 235| Target: Rs 314 | Return: 17 percent
The counter has witnessed a breakout of a bullish Inverse Head & shoulder pattern with the strong volume on the daily chart as well as a W-pattern on the longer time frame. The overall formation of the counter is very classical as it is trading above its all-important moving averages with a positive bias in momentum indicators.
Rs 272-274 is the neckline resistance; above this one can expect a big rally till Rs 314 levels while Rs 235 is strong support for any correction.
Expert: Mudit Goyal, Senior Research Analyst, Equity – Technicals at SMC Global Securities
Ambuja Cements: Buy | LTP: Rs 513 | Stop-Loss: Rs 480 | Target: Rs 550 | Return: 7 percent
The stock is trading in higher highs and higher lows, sort of rising channel which is bullish in nature.
Apart from this, stock is forming a “Bullish Pennant” pattern and likely to give the breakout of same. On the technical indicators front such as RSI and MACD are also suggesting buying for the stock.
Therefore, one can buy in the range of Rs 505-510 levels for the upside target of Rs 550 levels with stop-loss below Rs 480 levels.
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.
