We advise to continue maintain a strict trailing stop loss on long position, and book profit at higher level on weakness.
Dinesh Rohira
The Indian equity market continued to trade in upward trajectory on week-to-week basis for three consecutive periods favoured by steady inflow from foreign investors coupled with positive opinion polls for general-election. Further, strengthening of rupee at 69.67 odd levels against US dollar and stable global market aided the equity market to breakout from its consolidation phase of last three months.
During a week under review, the Nifty index managed to sustain above its long-term moving average and also closed above its psychological levels of 1100 on closing basis for a consistent period.
The index formed a weekly low of 11008 level on intraday basis, but managed to rebound to make weekly high of 11,383 levels. Despite a flat trade on daily scale to close at 11,343 levels, but index gained about 2.6 percent on week-to-week basis.
The top gainer was Nifty Realty and Banks, up by about 6.8 percent and 4.1 percent respectively. The Nifty IT index was only loser down by about 2.1 percent on weekly basis.
The Nifty index formed a long bullish candlestick pattern on weekly chart led by buying regime at lower level, but volatile trade on daily scale led to small bearish ‘hanging-man’ kind of pattern which indicates weak sentiment for buying. However, momentum indicator signaled a positive divergence with its weekly RSI 62 odd levels, and MACD continued to trade above its signal-line. The weekly resistance for index is now seen at 11,465 levels while support is placed at 11,060 odd levels.
Despite a positive cues backed by strong inflow in equity market and positive election sentiment, the India equity market is likely to remain capped on upside due to slow economy growth coupled with lack of major trigger on domestic front.
Further, overhang on Brexit issues and OPEC’s supply cut are likely to hit the domestic market in specific segment. Therefore, we advise to continue maintain a strict trailing stop loss on long position, and book profit at higher level on weakness. We maintain a weekly range-bound level at high of 11,465 levels on upside and 11,060 levels on downside.
Here are the top stock trading ideas which can give good returns:
DLF: Buy | Target: Rs 212 | Stop loss: Rs 190| Upside: 5%
DLF witnessed a strong breakout in last one-week sessions to trade above its 200-day moving average placed at Rs 182 odd levels on closing basis after remaining muted for three weeks, and further the scrip formed strong base on weekly scale.
The scrip largely traded in sideways direction with negative bias on its six-month price chart to consolidate from price-band of Rs 215-190 odd levels towards a low of Rs 140 zone which also stood as strong support level. The scrip also witnessed a significant volume growth during a same period to remain in positive trajectory, and formed a ‘long’ bullish candlestick pattern on both weekly and daily price chart indicating a buying regime.
The momentum indicator also outlined a positive divergence in price with weekly RSI at 61 odd levels coupled with MACD making bullish crossover to trade above its Signal-Line.
We have a buy recommendation for DLF which is currently trading at Rs 201.85
IndusInd Bank: Buy | Target: Rs 1750 | Stop loss: Rs 1620 | Upside: 4%
IndusInd Bank saw a significant breakout on weekly price-chart managing to close above its 200-days moving average placed at Rs 1630 odd levels, and continued to maintain a positive trajectory on daily scale for an extended period to outperform its market headlines.
The scrip initially consolidated from a price-band of Rs 1880 odd levels towards a low of Rs 1330 levels, and made a marginal rebound to remain in sideways direction. It formed a long bullish candlestick pattern on weekly price chart coupled with bullish pattern on daily scale backed by volume surge.
The momentum indicator outlined a positive divergence in price with RSI at 57 odd levels, and MACD likely to witness bullish crossover to trade above its Signal-Line.
We have a buy recommendation for IndusInd Bank which is currently trading at Rs 1682.70
Linde India: Sell | Target: Rs 489 | Stop loss: Rs 525 | Downside: 3%
Linde India continued to trade in negative trajectory for consecutive sessions to fall from higher price band of 800 levels towards a low of Rs 415 odd levels on its three-month price chart. It further breached below its important support level of 200-days moving average placed at Rs 519 odd levels this week after making a marginal rebound from low Rs 420 levels.
However, it failed to sustain upward trajectory which led to further selloff to trade below all the moving average levels. The scrip formed a long bearish candlestick pattern on weekly which indicates a persistent selling pressure coupled with bearish pattern on daily scale.
The momentum indicator continued to outline weak trend with weekly RSI at 49 odd levels while MACD made a bearish crossover this week to trade below its Signal-Line.
We have a sell recommendation for Linde India which is currently trading at Rs 504.85
The author is Founder and CEO at 5nance.com.
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