Last week, Nifty gyrated in a slender range of merely 160 points. Amid all this, the benchmark index concluded the week with moderate gains of one and half a percent.
Sameet Chavan
Last Monday Nifty started the proceedings with a decent upside gap, owing to favourable cues from the global bourses.
However, the momentum disappeared all of a sudden from the market which resulted in a lacklustre movement throughout the remaining part of the day.
Last week, Nifty gyrated in a slender range of merely 160 points. Amid all this, the benchmark index concluded the week with moderate gains of one and half a percent.
It’s been a stellar bull run for our markets since the March lows as markets never looked back to reach the crucial zone of 200-day SMA on the daily chart.
Lethargic activities, that we witnessed in the week gone by, was quite evident because the market has seen a relentless move without any major halt in between and has reached a crucial juncture.
Firstly, as mentioned, the key moving average of 200-day SMA on the daily chart which coincides with the Weekly 89-EMA as well as monthly 20-EMA and hence, the bulls had to respect them.
Ideally, if the market has to correct, this is the perfect zone from where it can.
In fact, previously, we had clearly advocated booking-profits in the ongoing rally in the zone of 10,700-11,000 and we continue to do so at least for the momentum traders.
But by no means, we advise going short on the market because the momentum in individual stocks is still strong and importantly, we are seeing a consensus opinion about the market correcting from the current levels.
As we all know, when everyone expects a fall, it never comes and vice versa. So, in our sense, the Nifty may first surpass the 10,850 mark and head towards the 78.6 percent retracement zone of the entire fall i.e. 11,000-11,200, where we can see some profit-booking taking place.
In this scenario, the hypothesis remains valid as long as the crucial support of 10,660-10,560 remains intact.
A breach of mentioned supports would certainly trigger a decent profit-booking in the market. Hence, one should keep a tab of all the mentioned possibilities and key levels.
It would be important to highlight that the banking space holds a key in all this and hence, all eyes would be on its heavyweight constituents as well.
Here are two trading ideas for the next 2-3 weeks:
Sunteck Realty | Buy | LTP: Rs 196.25 | Target price: Rs 212 | Stop loss: Rs 187 | Upside: 8%
After undergoing a massive price correction in the period of February to May, this stock slipped into a consolidation phase.
Looking at the recent price and volume activity, the consolidation in the last couple of months can be construed as a base-building process.
If we look at the daily timeframe, the stock prices are well-poised for a strong up-move in the near-term. Hence the rising volume activity around the breakout point indicates the possibility of surpassing crucial short-term hurdles.
Laurus Labs | Buy | LTP: Rs 597 | Target price: Rs 628 | Stop loss: Rs 578.20 | Upside: 5%
The entire pharmaceutical space finally came out from its long 5-year slumber phase in the month of April.
Since then, there has been no stopping and one after another, most of the stocks from this basket are soaring as if there is no tomorrow.
If we look at it in the hindsight, such a strong run-up was quite evident because stocks are in a process of compensating for such a long period of underperformance.
This stock, despite a massive run-up in the recent past, has caught our attention as we are witnessing a price breakout from the multi-year highs, along with a decent rise in volumes.
(The author is Chief Technical & Derivatives Analyst at Angel Broking)
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