Stock calls and outlook on Nifty by Sameet Chavan, Chief Analyst- Technical & Derivatives, Angel Broking:
Although, initial couple of days of the new calendar year was not so encouraging for our markets, we saw tremendous resilience at lower levels and the Nifty managed to clock record highs towards the fag end of the inaugural week. This wouldn’t have been possible without the participation of heavyweight ‘Banking’ basket, which finally woke up to propel the benchmarks at record highs.
It’s been a good start for our markets if we look at the weekly close well above the 10500 mark. Now, since we have entered an uncharted territory, every uptick from hereon would be considered as a new high. But, certainly, if we just focus on index, especially last 10 sessions’ move, it does not depict the right picture. The index remained in a slender range of 150 points, but the real interest was seen outside the index. So many small size midcap counters literally flew in last 3-4 days along with selective ‘F&O’ stocks.
We have been quite vocal on this possibility that one should avoid scratching heads in the index and should rather focus on such pockets. Going ahead, as far as index is concerned, we do not expect any major movement as we expect the index to remain lethargic and see some profit booking in the zone of 10600 – 10630. On the flipside, 10500 followed by 10400 would be seen as a crucial support zone.
Traders are repeatedly advised to stay light on index, continue focusing on stocks; but, now with a proper exit strategy. In fact, momentum traders should keep monetizing their existing trades if they are making decent returns of 15% – 25% during the week gone by.
NSE Scrip Code – Lyka Labs
View – Bullish
Last Close – Rs. 75.60
Justification – In last 3 – 4 trading sessions, we witnessed massive buying interest in some of the small size ‘Midcap’ counters. This stock was slightly late to realize it and hence, started participating in last couple of days. However, the kind of price action that we have seen along with reasonably higher volumes, the optimism is likely to continue. Technically speaking, the stock prices managed to surpass the 14-month resistance zone along with ‘RSI-Smoothened’ continuing its upward trajectory above the 70 mark. In addition, the ‘ADX 14’ started gaining strength above the 25 mark. Thus, we recommend buying this stock on minor dip for a target of Rs.87 over the next 5 – 10 sessions. The stop loss should be fixed at Rs. 64.50
NSE Scrip Code – DISH TV
View – Bullish
Last Close – Rs. 84.65
Justification – Recently, this stock managed to come out of its four weeks consolidation zone with sizable volumes; indicating strong buying interest above the breakout point of 82.50. However, due to lack of follow up buying, the stock prices once again consolidated with a gradual decline for nearly three days. However, the good thing in this minor dip is it has happened on very low volumes and in the process, the stock managed to defend the ‘200-day SMA’ successfully. On Friday, we saw decent recovery from lower levels, hinting towards the resumption of uptrend as we enter the next trading week. This certainly calls for a good low risk trade. Momentum traders can look to place their bets for a short term target of Rs.93. The stop loss should be fixed at Rs. 81.
NSE Scrip Code – Voltas
View – Bearish
Last Close – Rs. 646.35
Justification – This stock has been enjoying its stellar run since last twelve months and has clocked new record highs. Undoubtedly, the longer term outlook remains strongly bullish as the overall structure looks quite sturdy. But, with a near term view; there are some early signs of exhaustions. Since last couple of weeks, the stock has been struggling to sustain around 670 and despite market closing at historical highs, the stock remained under pressure. Technically speaking, we can see a formation of ‘Dark Cloud Cover’ at recent highs formed during the penultimate week, which got activated due to last week’s decline. Thus, we continue to recommend selling for a short term target of Rs.612. The stop loss now should be fixed at Rs. 661.
Disclaimer: The analyst may have positions in any or all the stocks mentioned above.