Is there an investment opportunity in PSP Projects shares?

The week gone by was more of consolidation for the domestic equity market as the benchmark NSE Nifty first suffered profit booking and then fresh buying interest. Initially, the index slipped below 15,600-mark but soon gathered some strength as the week progressed.

Ultimately, it managed to register another new high of 15,835 and closed the week with a change of 0.82%. On the other hand, there was some disappointment from the banking index. The Nifty Bank index closed in red with a cut of around 0.70% from its previous week’s close.

Going ahead, we believe 15,800 would be a crucial resistance for Nifty. A sustainable move above the same might reinforce the index to reach the milestone of 16,000. However, we may see some correction once the index reaches 16,000.

On the downside, 15,500 would be decisive support for the coming week. A breach of the same might halt the ongoing momentum. With regards to the Nifty Bank index, 34,500 would be intermediate support and a breach of the same could result in further underperformance by the banking stocks.

However, as the broader trend is still intact we expect banking stocks to outperform at least once before the temporary top is being made. Here are two stock recommendations for the next week.

Alkem Laboratories | Buy | Stop loss: Rs 3,050 | Target price: Rs 3,500
Breakout at the lifetime high is resembling a bullish Cup and Handle pattern. Theoretical, the target for the pattern comes around Rs 3,700.

UPL | Sell | Buy | Stop loss: Rs 865 | Target price: Rs 775
The stock is overbought on a daily scale. We are witnessing a negative crossover in the daily RSI smoothened oscillator. Short term trader could book their longs or go fresh short for time being.

(The author is AVP-Technical Research at Anand Rathi Shares and Stock Brokers, views expressed are personal)