Some respite after last week’s hiccup
The week ending September 4 put brakes on the recent euphoria on the back of geopolitical concerns with respect to the India-China clash at the border and to make it worse, US markets started correcting sharply after a strong gravity defying move in the last couple of months. All these factors triggered profit booking in our market and left us with some uncertainty at the end of the previous week. Fortunately, no escalation was seen over the last weekend and during the week also. Hence, some respite was seen in the latter half to reclaim the 11450 mark.
In the week gone by, no further damage was done after a previous week’s hiccup. However, the overall intra-week range was extremely small and barring one or two days, there was no major activity seen in indices. In our sense, one should still continue with a slightly cautious stance because the uncertainty is still looming over and till the time, we do not get clarity with respect to all these developments, better to stay light with a stock specific approach. As far as levels are concerned, 11,550-11,650 are likely to act as immediate hurdles; whereas on the lower side, 11,350-11,200 would be seen as a key support zone.
Last week, majority of the gains were contributed by the stellar move in Reliance Industries towards the fag end and IT stocks too chip in. At this juncture, the banking index is clearly underperforming and is placed around the crucial junction. We are observing a cluster of support around 22,200-22,000 and till the time it is defended, we can expect some recovery in the market. However, if it fails to hold this, the Nifty can easily slide below the key support of 11,200. So, one should keep a close eye on all these possibilities and should position accordingly.
NSE Scrip Code – ADANIPORTS
Last Close – Rs. 342.50
Justification – This stock has corrected gradually over the past couple of weeks. However, it has now reached a cluster of support i.e. a converging point of two key moving averages, ’89 EMA’ as well as ‘200-SMA’ on daily chart. Importantly, Friday’s candle resembles a 'Bullish Hammer' pattern and hence, we expect the stock to give a recovery in next few days. One can look to go long from current level to a decline up to 338 for a target of Rs.360 over the next few days. The stop loss can be placed at Rs.332.
NSE Scrip Code – WIPRO
View – Bullish
Last Close – Rs. 293.30
Justification – The entire IT space has provided a good helping hand to defend Nifty this week along with the major contributor RELIANCE. However, unlike other peers, the activity in WIPRO remained muted till Thursday. Finally, on Friday, this stock seems to have come out of its consolidation and finally joined hands with larger peers. The daily chart depicts a ‘Bullish Flag’ pattern along with more than average daily volumes. The way charts are shaped up, we expect the stock to do well in next few days. Hence, one can look to go long for an extended move towards Rs.310 and the stop loss can be placed at Rs.282.
NSE Scrip Code – PVR
Last Close – Rs. 1257
Justification – Post the March mayhem, the stock prices initially consolidated and then gave some decent recovery in the last couple of months. However, the up move seems to have paused for a while and prices are in a declining mode again. On the daily chart, prices have slipped below key short-term averages and in fact, the combination of ‘5 & 20 EMA’ has confirmed a bearish crossover. Momentum traders can look to short on a minor bounce for a target of Rs.1220 and the stop to be placed at Rs.1290.
Disclaimer: Sameet Chavan is Chief Analyst- Technical & Derivatives at Angel Broking. The analyst may have positions in one or more stocks. Views are personal.