Traders are advised to keep following stock-specific moves and the base now remains at 10,660–10,560.
Sameet Chavan
The week gone by was an action-packed one for Indian markets, as well as for global markets.
The domestic markets saw a roller-coaster move throughout last week. In fact, during the weeks, swings were wild, barring Friday’s session where we witnessed a unidirectional northward move.
A possible breakout from the sturdy wall of 10,850 was anticipated last week. It was expected in the initial part of the week but the market went through a correction first and so, the conviction became stronger during the middle of the week about Nifty surpassing the hurdle soon.
Finally with Friday’s late surge in banking conglomerates, Nifty has confirmed a breakout above 10,850, which resembles a ‘Bullish Flag’ pattern on the daily chart.
Now, the banking index seems to have regained strength which we believe should lead the movement in the forthcoming week.
As far as levels are concerned, the up-move should ideally get extended towards the 78.6 percent retracement zone at 11,100–11,200.
Since we saw a small decline early last week, we will have to reassess the situation whether the markets have further steam left to go beyond these levels or not.
Traders are advised to keep following stock-specific moves and the base now remains at 10,660–10,560.
Here are two buy calls for the next 1-2 weeks:
Bharat Forge | Buy | LTP: Rs 377.70 | Target price: Rs 405 | Stop loss: Rs 362 | Upside: 7%
Last month, after its previous quarterly numbers, the stock prices took a nosedive to test the lower end of the ‘Broadening’ or ‘Megaphone’ pattern on the daily chart.
As per the requirement, the fall got arrested around it to form a reversal pattern which resulted in a confirmation of the 5th point.
Since then, this counter has been continuing its upward momentum. If we look at the daily chart now, we can see the formation of a ‘Bullish Flag’ pattern and the same has been confirmed last Thursday.
Hence, last Friday’s muted session can be construed as a good buying opportunity in the stock.
This was one of the most popular and hyped IPOs in recent years and due to its unfortunate timing at the coronavirus outbreak, the listing was very disappointing for investors.
In fact, due to massive selloff thereafter, the stock prices plunged more than 30 percent in the following weeks.
However, after forming a strong base around Rs 500, the stock has given a stellar move over the past couple of months along with the broader market recovery.
Now, with last Friday’s smart move, the stock has managed to give the highest ever close above Rs 750 mark.
Although the historical price data is not sufficient, the chart structure and volume activity looks encouraging.
(The author is Chief Technical & Derivatives Analyst at Angel Broking)
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