Nifty view & two stocks that Sameet Chavan of Angel Broking is bullish on

Stock calls and Outlook on Nifty by Mr. Sameet Chavan, Chief Analyst- Technical & Derivatives, Angel Broking Ltd.

Nifty Outlook
 

Index consolidates but dream run continues for broader market

The last week was a week of consolidation for our markets as we saw Nifty gyrating in a slender range of merely 100 points. However, the overall bias remained positive despite some small intraday hiccups. The stage was set on Monday itself when we clocked fresh record highs well above the 12,300-mark on a closing basis. Eventually, the muted week for benchmark index ended with gains over seven tenths of per cent.
 

If we just have a glance at the Nifty’s price action for the entire week, it does not portray the real picture.  Because, although the index did nothing, there were bundle of stocks from the broader market that did exceedingly well and kept the street buzzing throughout the week. The only disappointing factor was the underperformance of the banking space as it became the real culprit for Nifty remaining in this tight range. Nevertheless, we still remain upbeat and expect the index to slowly-steadily head towards next millstones of 12,400 – 12,500. The apt strategy to trade in such behaviour would be to play the range i.e. buy as close as possible to supports and vice versa. As far as support levels are concerned, 12,278 – 12,220 becomes a key zone for the index. 
 

We have been quite vocal about the midcap index since last few weeks and looking at this week’s stellar run, the recent anticipation finally turned into a reality. Yes, it’s hastening towards a strong hurdle now and since a bit overbought, we may see in between some profit booking in coming days. But mind you, by no means it would be trend reversal as we expect the midcap basket to unfold further legs of the rally in coming weeks. Apart from this, the notable mover on Friday was the entire ‘Pharmaceutical’ basket, which has broken above major barrier of ‘200-SMA’ on daily chart. Do watch out for this space as we expect some good traction in this underperforming sector. 

Stock Recommendations:
 

NSE Code – APLLTD (Alembic Pharma)

View –   Bullish

Last Close –   Rs. 601.65

Justification – The Pharma space has finally joined the bull’s party as we can see this index confirming a bullish reversal ‘Inverse Head N Shoulder’ breakout along with prices crossing above 200SMA with some authority. This stock, too, has broken above its hurdle of 590 levels which thrice acted as stiff resistance in the last few months confirming a Cup N Handle bullish breakout. In addition, in the last few sessions, the up move has been supported by a sizeable increase in volume, indicating strong buying interest at multi-month highs. Thus, we recommend buying this stock on a minor decline for a target of Rs.690 over the next days. The stop loss should be fixed at Rs.551.
 

NSE Code – SIEMENS

View –   Bullish

Last Close –   Rs. 1,588

Justification – After a sharp up move from the levels of 1,086 to 1,717, Siemens' stock price has corrected in the last few months. The said correction, however, was arrested around the 100EMA and after forming a base for a month the stock price has resumed the primary uptrend by confirming a range breakout. Prices have closed above the higher band of Bollinger band suggesting a trending up move post the recent consolidation. Momentum oscillator i.e. RSIS as well has entered a positive zone supporting the buy call. Looking at the favorable risk reward ratio, traders are advised to go long for a target of Rs.1,750 over the next few days. The stop loss should be fixed at Rs.1,490.

Disclaimer: Views expressed are the author's own. He may have positions in one or all of the above mentioned stocks.