Consider these 9 things before investing in mutual funds!

The last week of the year 2021 started on soft note on Monday however from there the bulls were totally geared up to end the year on a high note as they started breaking intermediate resistance in between and eventually ended well above 17350 with gains of a two percent against the previous week close. This may seem to be a small gains however the way the broader markets outperformed was quite astonishing. Despite the recent correction the year 2021 ended with staggering more than 24% gains against its previous week close.

Now bulls seems to be all set to carry this momentum in the year 2022 and hence traders can continue to have the positive approach. Conservative traders can wait for Nifty to break above the ‘Descending Sloping Channel’ placed around the 17400 levels however we sense this resistance to be taken out soon. The bank nifty has been the clear under performer however this space as well chipped-in on Friday to break above its recent congestion zone and has approached a key resistance of bearish gap and 200SMA. We sense further traction in the banking space may turned catalyst for the next leg of up move in the broader markets.

To conclude, we sense benchmark Nifty headed for the pre-budget rally and the levels to be seen in the near term would be 17550 – 17600 with strong support seen around the 17150 levels. Traders are hence advised to keep positive approach and focus on thematic moves that are likely to provide outperforming opportunities.

Stock recommendations:

1.  NSE Scrip Code – KOTAKBANK

 View                  –   Bullish

Last Close          –   Rs. 1796.10

Justification – The stock has formed a bullish engulfing candle on the weekly chart after taking support on 89WEMA. On the daily chart, the stock prices were trading in a range and that range has been broken on the upside confirming a bullish range breakout. Momentum oscillator i.e. RSI as well has given a fresh buy signal with its smoothened moving average. Looking at all the above scenario, we sense a good reward to risk ratio at current levels and hence we recommend a buy at current levels for a potential target of Rs. 1880 in the near term. The stop loss can be kept at Rs. 1760.

2.  NSE Scrip Code – BALAJI AMINES

 View                  –   Bullish

Last Close          –   Rs. 3409.80

Since the last one month the stock prices have been forming a base around the 200SMA and was gyrating within a narrow range. Eventually on Friday, we witnessed a strong price and volume breakout confirming a ‘Rectangular Channel’ breakout. The RSI has crossed above its mean of 50 levels indicating positive trend and prices have crossed above all major moving averages indicating overall bullishness in the counter. We hence recommend a buy for a near term target of Rs. 3890. The stop loss can be placed at Rs. 3170.

(The writer of the article is a technical analyst, views are personal)