The momentum is intact and the Friday’s correction is on expected lines given the consistent uptrend in the past. Hence, once the current consolidation ends, the Nifty50 is expected to resume upward journey once again towards 18,900-19,000 levels in coming days, with crucial supports at 18,500-18,300, experts said
Sunil Shankar Matkar
December 05, 2022 / 07:05 AM IST
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The Nifty50 reversed some gains on last Friday after rallying in previous eight straight sessions. But the index recorded one percent gain for yet another week ended December 2, forming bullish candlestick pattern on the weekly frame and making higher highs formation for seventh week in a row, tracking favourable global cues.
In fact the index has ended at record closing high on a weekly basis, though it retraced from record highs on daily charts. The momentum is intact and Friday’s correction is on expected lines given the consistent uptrend in the past. Hence, once the current consolidation ends, the Nifty50 is expected to resume upward journey once again towards 18,900-19,000 levels in coming days, with crucial supports at 18,500-18,300, experts said.
The momentum indicators RSI (relative strength index) also traded above 60 mark with upward bias on the weekly basis, and the MACD (moving average convergence divergence) on the weekly as well as monthly frames shows positive trend.
“The chart structure construes a positive development, with the indices being in a cycle of higher highs – higher lows. 18,500 is expected to act as the sacrosanct support for the index. While on the higher end, the swing high of 18,900 odd zone is expected to provide some intermediate resistance, followed by the psychological mark of 19,000 in the near term,” Osho Krishan, Senior Analyst – Technical & Derivative Research at Angel One said.
He remains sanguine with the up trend and would advocate the traders to utilize the dips to add long position in the index.
Also, he expects strong moves outside the indices as the midcap space has witnessed a multi-month breakout and could unfold a new leg of rally in the comparable period.
Simultaneously, one should stay abreast of global and domestic developments on a regular basis and continue with a similar buy on decline strategy till the time important supports are held comfortably, the market expert advised.
Let’s take a look at the top 10 trading ideas by experts for the next three-four weeks. Returns are based on the December 2 closing prices:
Expert: Nagaraj Shetti, Technical Research Analyst at HDFC Securities
HEG: Buy | LTP: Rs 1,060 | Stop-Loss: Rs 995 | Target: Rs 1,155 | Return: 9 percent
The weekly timeframe chart of HEG indicates an upside bounce after a consolidation movement of last week. We observe a formation of higher bottom at Rs 956 in mid of November 2022, currently the stock price is moving up steadily thereby confirming bottom reversal pattern.
The overall weekly chart pattern indicates a completion of larger downtrend in the stock price and a resumption of renewed buying interest from the higher lows.
The stock price is now placed at the cluster hurdle of weekly 10 and 20 EMA (exponential moving average) and down sloping trend line around Rs 1,080-1,100 levels. Hence, a sustainable move above this area is expected to have a sharp positive impact ahead.
Buying can be initiated in HEG at CMP (Rs 1,060), add more on dips down to Rs 1,025, and wait for the upside target of Rs 1,155 in the next 3-5 weeks, with a stop-loss of Rs 995.
MTAR Technologies: Buy | LTP: Rs 1,738 | Stop-Loss: Rs 1,625 | Target: Rs 1,910 | Return: 10 percent
The weekly timeframe chart of the stock price, MTAR Technologies indicates a sustainable upside bounce in last week. The stock price was moving in a narrow range over the last few months and is currently showed upside breakout of the range at Rs 1,700 levels.
Hence, further sustainable move from here could be considered as a significant upside breakout and the stock price could move up sharply. After the formation of crucial bottom in June 2022, the stock price seems to have formed a higher bottom recently and started to move up. Volume has started to rise during upside breakout and weekly RSI shows positive indication.
One may look to buy MTAR Technologies at CMP (Rs 1,738), add more on dips down to Rs 1,670 and wait for the upside target of Rs 1,910 in the next 3-5 weeks, with a stop-loss of Rs 1,625.
Expert: Shrikant Chouhan, Head of Equity research (Retail) at Kotak Securities
Muthoot Finance: Buy | LTP: Rs 1,136 | Stop-Loss: Rs 1,050 | Target: Rs 1,300 | Return: 14 percent
The stock has formed a double bottom formation on the daily chart. On Friday, the stock absorbed the selling pressure from the falling trend line at Rs 1,125.
It will face the next set of resistance at Rs 1,215 to validate the formation of a double bottom. It is a buy at current levels and more on a drop at Rs 1,080. One can keep a stop-loss at Rs 1,050, and hurdles will be at Rs 1,215 and Rs 1,300.
Bharat Dynamics: Buy | LTP: Rs 966 | Stop-Loss: Rs 890 | Target: Rs 1,100 | Return: 14 percent
It is forming multiple continuation formations between the narrow range of Rs 900 and Rs 1,025. These types of formations eventually enter a trending wave. The Rs 940 and Rs 900 levels would be major support, however, Rs 1,000 and Rs 1,025 would be immediate resistance levels.
Based on the weekly formation, we are expecting a further upside in the stock. Buy at current levels with stop-loss at Rs 890. On higher levels, it has the potential to rally towards Rs 1,100 with a major hurdle at Rs 1,025.
Bharat Forge: Buy | LTP: Rs 855 | Stop-Loss: Rs 815 | Target: Rs 897 | Return: 5 percent
On Friday, the stock made a higher low at Rs 839 as compared to the previous low which was at Rs 816. After hitting an all-time high of Rs 897 in the previous month, it got into profit-taking mode.
However, after hitting the support of Rs 816, the stock has formed a solid base which will take the stock towards Rs 1,000 in the long run. In the medium term, the stock has the potential to move higher towards Rs 897 again. Buy at current levels and place stop-loss at Rs 815.
Expert: Vikas Jain, Senior Technical and Derivative Research Analyst at Reliance Securities
Kotak Mahindra Bank: Buy | LTP: Rs 1,931 | Stop-Loss: Rs 1,790 | Target: Rs 2,180 | Return: 13 percent
The stock has made higher bottoms on the weekly chart with an inside range and trending in a narrow range confirms a breakout.
Its weekly RSI has turned upwards from the lower part of the range and other key technical indicators on near-term timeframe chart are positively poised.
The stock has a strong support near its multi band of moving averages on the weekly time scale and the strong positive momentum in the sector reinforces our positive stance.
Therefore, we recommend directional long position for a target of Rs 2,180 with a stop-loss of Rs 1,790.
LIC Housing Finance: Buy | LTP: Rs 394 | Stop-Loss: Rs 368 | Target: Rs 470 | Return: 19 percent
The stock oscillated at around its 200-day SMA (simple moving average) and rose to 4-week closing high subsequently.
Trendline breakout in its daily RSI and bullish cross-over in its daily MACD signals that the stock is on the verge of a turnaround.
A stable move above its key band of weekly moving averages will support a strong up-move and could take the stock towards Rs 445 initially and Rs 470 subsequently.
Therefore, we recommend directional long position for a target of Rs 470 with a stop-loss of Rs 368.
Voltas: Buy | LTP: Rs 855 | Stop-Loss: Rs 810 | Target: Rs 950 | Return: 11 percent
Since April 2022, the stock witnessed a vertical fall, which dragged it from Rs 1,348 to Rs 804.
On the lower side, the stock found support at around its 55-month EMA (exponential moving average) and crossed its 200-week average.
The stock bounced from its 52-week low of Rs 804 and gained 3 percent week-on-week basis.
Its weekly RSI reversed from its bottom level and poised for a turnaround and indicates a strong reversal in the stock from current juncture.
Therefore, we recommend directional long position for a target of Rs 950 with a stop-loss of Rs 810.
Expert: Jigar S Patel, Senior Manager – Equity Research at Anand Rathi
Pfizer: Buy | LTP: Rs 4,588 | Stop-Loss: Rs 4,380 | Target: Rs 5,000 | Return: 9 percent
Since September 2021, the counter observed a free fall from Rs 6,175 to Rs 4,070 and has stabilized near its historical support of Rs 4,300. From the candlesticks pattern perspective during 3rd week of November 2022, it has made a perfect Hammer candlesticks pattern near support of Rs 4,300 followed by a solid breakout of its previous swing high of Rs 4,550 thus confirming its further upside.
From the indicator perspective, the weekly RSI has rebounded from 50 levels along with the weekly Directional movement index displaying a strong upside.
One can buy in a small tranche at current levels and buy another tranche at around Rs 4,500 levels. The upside target is expected till Rs 5,000 and with a stop-loss of Rs 4,380.
Tech Mahindra: Buy | LTP: Rs 1,115 | Stop-Loss: Rs 1,070 | Target: Rs 1,200 | Return: 8 percent
The stock has corrected almost 48 percent from its top of Rs 1,754 which was made on December 27, 2021. From June 15, 2022 till September 15, 2022 it has been consolidating near the crucial support zone of Rs 950-1,000.
Recently the stock confirmed a couple of Dojis followed by a Hammer at mentioned support zone which could be an early sign of early reversal.
From the indicator perspective, the weekly RSI has displayed an impulsive structure near the oversold zone along with the weekly directional movement index displaying a strong upside.
One can buy in a small tranche at current levels and buy another tranche at around Rs 1,000 levels. The upside target is expected till Rs 1,200 and with a stop-loss of Rs 1,070.
Expert: Vidnyan Sawant, AVP – Technical Research at GEPL Capital
Radico Khaitan: Buy | LTP: Rs 1,134 | Stop-Loss: Rs 1,050 | Target: Rs 1,300 | Return: 15 percent
Radico Khaitan has shown a strong bounce while taking support from the crucial level of Rs 978-940. At the same level Change in the polarity by the prices can be witnessed too.
In the last week, the stock gave a breakout from the Falling wedge pattern indicating beginning of trend to the upside.
The CIP (Change in polarity) level is in sync with the 17-week EMA which acted as a variable support for prices in prior uptrend which took place since April 2020.
The momentum indicator RSI on the weekly timeframe has shown a range shift reflecting the rising momentum of the stock.
Going ahead we expect the prices to move higher till the level of Rs 1,300 where the stop-loss be Rs 1,050 on the closing basis.
IDFC: Buy | LTP: Rs 83.80 | Stop-Loss: Rs 78.50 | Target: Rs 95 | Return: 13 percent
IDFC, this week created a new 52-week High, which tells that the stock already is in strong momentum.
The stock has sustained well above the rising trendline which acted as variable resistance since March 2021 to the prices, this points towards the beginning of the trend on the upside.
The Ratio chart versus Bank Nifty has shown a breakout too which points toward the continuation of outperformance from the counter.
The uptrend since June 2022 was witnessed with a steady rise in volume which reflects the good amount of long built up.
The 52-week breakout was preceded by prices taking support from its 10-week EMA, Which acted as a Variable support to the prices.
Going ahead we expect the prices to go higher till the level of Rs 95 where the stop-loss must be Rs 78.50 on the closing basis.
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.
