Further consolidation cannot be ruled out, but once 10,495 get taken out, the index can head towards 11,640 in the short term. On the other hand, 11,366 – 11,340 shall act as a key support zone for the index, Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas, said in an interview with Moneycontrol’s Kshitij Anand.
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| Stock Market News and Tips |
Q) Indian markets closed the volatile week on a positive note. The Nifty held on to 11,400 levels. How is the technical setup looking for the index? What are the crucial levels to watch out for next week?
A) Yes, that’s right. The Nifty has posted a fourth consecutive positive close on the weekly chart. The week went by started on a negative note; however, the bulls managed to push the index higher towards the end.
In terms of the wave structure, the index has completed an Impulse on the upside from 10,557 to 11,495. The hourly chart reveals that the fall from the recent high of 11495 is a corrective structure.
This means that the fall is unlikely to turn out to be a deep one. A higher degree structure shows that this is a fourth wave consolidation, which is typically a sideways one.
Further consolidation cannot be ruled out until the index trades below the level of 11,495. Once that get taken out, the index can head towards 11,640 in the short term. On the other hand, 11,366 – 11,340 shall act as a key support zone for the index.
Q) How is rupee looking on technical charts?
A) USD/INR, in the last week, has broken out from a bullish Flag pattern with a breakaway gap. The bullish price breakout has occurred on the backdrop of bullish daily momentum indicator.
The conservative pattern target has already been met on the upside whereas the subsequent targets are 70.60 and 71.50. On the other hand, the gap area of 69.40 – 69.02 shall now assume the role of support.
Q) Small & midcap stocks have picked up momentum which was not visible in earlier rallies. Do you think that the recovery has begun in this space?
A) The small-cap & mid-cap indices have witnessed a sharp bounce over the last few weeks. On the way up, they have surpassed their respective multi-month falling trendlines.
This is a bullish sign from a short to medium term perspective. So, there is indeed a sign of recovery in the broader market
Q) Top three-five stocks (with rationale) which investors can look at with a holding period of 1 month?
A) Here is a list of top three stocks which could give up to 10-13% return:
L&T Finance Holdings: Buy| LTP: Rs 181.95| Target: Rs 200| Stop loss: Rs 173| Return: 10.5%
The stock has formed a bullish Flag pattern on the daily chart and is on the verge of a breakout on the upside. In the last session, it has given a bullish breakout from an Inside bar
Ambuja Cements: Buy| LTP: Rs 228| Stop loss: Rs 220| Target: Rs 252| Return: 10%
The stock has completed a three wave correction after an Impulse on the upside. Post the correction, the stock has taken support near the key daily moving averages. Hereon, next set of Impulse is expected to start on the upside.
Raymond: Buy| LTP: Rs 794| Stop loss: Rs 756| Target: Rs 900| Return: 13%
The stock has formed an Ending Diagonal pattern after a substantial fall & has broken out on the upside in the last session. The daily momentum indicator is showing a positive divergence, which is a bullish sign.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol are his own and not that of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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