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Stock calls and outlook on Nifty by Sameet Chavan, Chief Analyst- Technical & Derivatives, Angel Broking:
It’s been a week of consolidation for our markets but the encouraging point was market managed to maintain their positive mood throughout the week in a gradual manner. In terms of intraday activity, Friday was the only day when we saw some action in the market as rising hopes over Standard and Poor’s (S&P) rating (for India) boosted traders’ sentiments.
During the entire week, we have been mentioning the trading range of 10,250 – 10,368 for the index. After four days of struggle, the Nifty finally managed to break the upper range. But, the kind of buying momentum ideally should have been witnessed after a breakout was clearly lacking. Hence, we need to relook the situation and will have to revise the upper range a bit. Now, if we look at the hourly chart, we can observe Nifty facing a resistance on concluding day precisely at the 78.6% retracement level (10,405) of the recent down move. Hence, the bullish momentum can be witnessed only above this mentioned resistance of 10405. On the flipside, 10,350-10,307 would now be seen as a key support zone; because, violation of this may apply brakes on the recent optimism.
Barring last day, we saw individual stocks soaring to a great extent during the week and we advised on following stock centric moves. But, on Friday, there was no clear outperformance from individual stocks as well. Hence, the coming week being the expiry one, first half would be very important for our market as we expect some volatility to pick up and hence, we may see some clear moves thereafter.
1) Dish TV
Last Close: Rs 82
A strong corrective move began during the early part of April and since then the stock has undergone a massive price-wise as well as time-wise corrective phase. In last couple of days, the stock prices managed to give a smart recovery after consolidating around the Rs 75 for nearly three weeks. In this course of action, we can now see a breakout from the bullish ‘Cap and Handle’ pattern on daily chart along with sizable volumes. Hence, we recommend buying this stock on a minor decline for a target of Rs 90. The stop loss now should be fixed at Rs 75.
Last Close: Rs 298.85
This south based midcap ‘Realty’ counter has been one of the steady performers since the early part of 2014. The recent multi-month consolidation came to an end last week after stock prices breaking out from the hurdle of Rs 294 on a closing basis. This price development was accompanied by reasonably higher volumes; providing credence to the breakout. Hence, last couple of day’s breather can be construed as a good buying opportunity. One can buy this stock for a target of Rs 330 by following a strict stop loss of Rs 288.
3) Hero MotoCorp
Last Close: Rs 3653.25
A strong Bull run in this stock took a pause during the early part of September. Since then the stock has been experiencing a corrective phase in a gradual manner. Recently, we witnessed a breakdown from crucial ‘Neckline’ around Rs 3700. In last couple of weeks, the stock prices resisted around it and are facing strong selling pressure at intraday highs. Thus, we expect some weakness to continue in this counter. One can sell this stock for a target of Rs 3480 over the next 5 to 10 sessions. The stop loss should be fixed at Rs 3731.
Disclaimer: The analyst may have positions in any or all the stocks mentioned above.