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Stock calls and Outlook on Nifty by Sameet Chavan, Chief Analyst- Technical & Derivatives, Angel Broking: Nifty Outlook In the week gone by, we saw Nifty ascending to a great extent in first couple of trading sessions and in this process, has managed to clock record highs well above the 11,000 mark. However, during the latter half, the index chose to consolidate a bit after a sharp run as we were heading for an extended weekend just ahead of the Union Budget. Eventually, the Nifty successfully managed to defend its important milestone of 11,000 on a weekly basis. Of late, we saw tremendous optimism in our market and hence, the index kept marching higher to conquer many important junctions. However, since last couple of days, we can see some respite in the market as the index hastened towards its crucial near term point of 11,100 before anyone could realize it. We have been stating the importance of this level as it coincides with the 161% price extension of the rally seen during 2008 – 10. Although, recently, there has been not much respect to any level but since 161% is considered as an important ratio as per the ‘Fibonacci series’ and mainly because the major event is around the corner now, it’s important to draw attention to this point. Going forward, we need to see how market behaves in next three trading sessions; because in last couple of days, we have already witnessed a good amount of profit booking in number of individual stocks. As far as trading strategy for next few days is concerned, we reiterate that traders should look to take some money off the table ahead of the major event. Last year, trading before the budget was quite easy as compared to the current one; but now, low hanging fruit is already gone and hence, it would be a daunting task finding good trade set ups. One can keep focusing on stock specific moves by following a proper exit strategy. Stock recommendations: Majesco View – Bullish Last Close – Rs 565.30 The stock has been maintaining its sturdy structure ever since we witnessed a trend reversal around 400 in the month of September 2017. Recently, there was a breakout seen from the congestion zone around 560 along with significantly higher volumes.
This development confirmed a ‘Bullish Flag’ pattern on weekly chart and thereby projecting much higher levels in months to come. Thus, we recommend buying this stock for a target of Rs.702. The stop loss should be fixed at Rs. 481. ITC View – Bullish Last Close – Rs 281.25 After taking a strong knock during the midst of the July month, this stock slipped into a consolidation mode and has contributed nothing in the gigantic rally our markets experienced meanwhile. Now, looking at past couple of weeks’ price action, It appears that the stock is out of its ‘Sleep Mode’ and poised for a decent up move. The strong base building process has already been done around 250 – 260 and unless we don’t see any unfavorable outcome from budget (excised duty on cigarettes), this stock is likely to do well in coming weeks. Considering it’s over sensitiveness to this announcement, traders are advised to follow strict stop loss at Rs.258 for any long positions. One can look to buy around Rs.275 for a target of Rs.304. Aurobindo Pharma View – Bearish Last Close – Rs 639.70 This stock has been showing completely contradictory moves to its peer counters. Most of the ‘Pharmaceutical’ stocks moved well in the recent past; but at the same time, this stock has been gradually declining and is now trading around its three months’ low. Looking at the daily chart, we expect 660 to act as a sturdy wall and very soon, the stock can continue drifting further after violating crucial support of 634. Thus, we recommend selling this stock below 634 for a short term target of Rs.600. The stop loss now should be fixed at Rs 661. Disclaimer: The analyst may have positions in any or all the stocks mentioned above.