Nifty outlook & stock picks by Sameet Chavan: Buy Piramal Entp, Jamna Auto

Nifty Outlook

The market continues with its recent trend where the opening on Monday happens either with an upside or a downside gap. For the second straight week, the market started on a pleasant note, owing to some recovery in the global markets. On the same day, Nifty managed to move beyond 14,900 first and the following day, the sturdy wall of 15,000 was thrashed convincingly. Everything looked hunky-dory but all of a sudden the global markets again became nervous and due to this, we witnessed a decent correction, with Nifty sneaking below the psychosocially important level. But the market was not done with its surprises as we saw a spectacular rally on Friday which pushed Nifty to a two-month high. 

We always say ‘All’s well that ends well’ and last week’s price action was the perfect example of it. In the first four sessions, the bulls and bears had equal shares and as expected, Friday became the real decider. The real catalyst behind this optimism was the cooling off in the global bourses as well as various asset classes. Since our markets had the inherent strength, this development provided the impetus for the move towards 15,200. Now, the way things are placed, retesting the record high of 15,431.75 looks eminent. Before this, 15,220 – 15,340 are the levels to watch out for. On the flip side, it is important to note that the immediate base has shifted higher towards 15,000 – 14,900, which is an encouraging sign. 

Looking at the broad-based participation on Friday, especially the way banking space is poised, we will not be surprised to see the index heading towards record its high in the first half of this week. In fact, if all the other factors support, we may see new highs also in the coming sessions. However having said that, we should not become too complacent and keep a close track of how global markets behave over the next few days. Any aberration on this aspect may again dent the possibility of a short term rally. It’s better to take one step as a time and continue with a stock-specific approach by following proper risk management.

Stock Recommendations

NSE Scrip Code: Piramal Enterprises

View: Bullish

Last Close: Rs 1,728.70

Justification: After a spectacular recovery from March 2020 fiasco, the stock has finally taken a breather around the ‘200-SMA’ on the weekly chart. The stock prices underwent some timewise as well as price-wise correction over the past three months. However, looking at the past few weeks’ price action, it appears that the stock has cemented its position around the previous breakout point of Rs 1,600. This coincided with the rock-solid support zone of the weekly '89-EMA’ as well. On Friday, we witnessed the first sign of strength as we saw a breakout on the smaller time frame charts. Looking at the pieces of evidence, we recommend going long for a target of Rs 1,835 in the coming days. The strict stop loss can be placed at Rs 1,668.

NSE Scrip Code: Jamna Auto

View: Bullish

Last Close: Rs 77.45

Justification: This auto-ancillary stock has been one of the rank outperformers over the past few months. We have been witnessing a series of higher highs higher lows in all time frame charts. Recently, most of the larger names within the ‘auto’ universe have undergone a decent price correction but this stock chose to move sideways rather than participating in the corrective phase. Now on Friday, it just took off and managed to traverse the recent congestion with ease. Looking at the volume activity, we may see this stock knocking on the three-digit mark door very soon. We recommend buying on a dip towards Rs 75-73 for momentum traders for a target of Rs 88 in the coming days.   The strict stop loss can be placed at Rs 69.  

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Disclaimer: Sameet Chavan is Chief Analyst - Technical & Derivatives at Angel Broking. The analyst may have positions in one or more stocks. Views are personal.