It was a week of consolidation where the benchmark index witnessed indecisive moves within a range and eventually ended with a cut less than a percent against the previous week close tad above 17150.
The benchmark lacked real traction as the heavyweight bank index struggled throughout the week and it was on cards as Bank Nifty was placed on a stiff resistance of bearish gap and 200SMA. The other heavyweight like IT, Metals, Reliance and to some extent some Pharma stocks provided helping hand to benchmark defend the psychological level of 17000 during the week.
In our sense, after the recent rally of more than 10%, our markets have entered a consolidation phase where the sector churning would continue in the near term. The undertone remains bullish and unless there’s no escalation in the geopolitical tension the 16900 – 17000 is likely to be remained defended and on the higher side 17400 – 17500 is to act as resistance during the expiry week.
The apt strategy would be to focus on Themes that are likely to perform during the sector churning.
NSE Scrip Code – INDIGO
View – Bullish
Last Close – Rs. 1940.55
Justification – On the daily chart, stock prices have confirmed bullish reversal pattern breakout known as ‘Cup N Handle’. The said breakout is supported with a gap that can be termed as a ‘Breakaway Gap’. In addition, good increase in volume can be seen as prices breaking above the key moving averages like 50SMA and 200SMA. Momentum oscillator i.e. RSI as well has entered positive zone supporting the buy call. Considering all the above technical scenarios’ we are upbeat on this counter and recommend a buy at current levels for a near term target of Rs.2080. The stop loss can be placed at Rs. 1870.
2. NSE Scrip Code – GODREJPROP
View – Bullish
Last Close – Rs. 1622.95
Justification – This front-line realty counter has been under pressure for the last few months however some of the technical evidence are now indicating that the stock prices may outperform in the near term. On the daily chart, we are witnessing a bullish reversal pattern breakout known as ‘Inverse Head n Shoulder’ on a long term support of 89WEMA. Prices have also closed above 50DMA that were previously acting as resistance and now indicates a change in polarity. In addition, we are also witnessing a bullish gap with good increasing volume that augurs well for the bulls. With all the above evidence, we recommend a buy in this counter for a near term target of Rs. 1710. The stop loss can be placed at Rs. 1574.
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