No major movement in the truncated week, 11700 defended successfully
After an extended weekend, our markets had a sluggish opening on Tuesday as there was no major trigger on the domestic as well as global front. Brent crude cooled off a bit but our markets had already discounted it while closing on previous Friday.
It’s been yet another week of consolidation for our markets, in fact the overall intra-week range shrunk drastically due to less number of sessions. There is nothing much to comment on considering the muted price action. The only notable observation that can be highlighted is the formation of a ‘Triangle’ pattern on hourly chart. Hence, going ahead, 11,790 – 11,655 are the levels to watch out for. A decisive move in either direction would confirm a breakout and thereby would provide an immediate path of action for the market participants.
At present, the ideal strategy would be to keep focusing on individual pockets that were buzzing during the week. We are heading towards the mega event (Election verdict slated on May 23) and hence, a possibility of rise in volatility cannot be ruled out. One needs to keep this thing in mind and should position accordingly from henceforth till the actual event day.
View – Bullish
Last Close – Rs. 177.95
Justification – We saw good traction in most of the realty counters towards the fag end of the week. This high beta name seems to have completed its recent correction and is likely to resume its previous uptrend. Technically speaking, with recent decline, it has retraced its previous up move precisely by 61.8 per cent. In addition, we can see a formation of ‘Bullish Hammer’ pattern at this key support zone. The said pattern has now been activated and hence, a possibility of a decent up move in coming days cannot be ruled out. We recommend buying at current levels for a target of Rs 198 and the stop loss should be fixed at Rs 166.40.
View – Bullish
Last Close – Rs. 486.60
Justification – This auto ancillary company has been a laggard in the recent past. In the process, prices gradually declined towards its previous low of 456.10 (low on February 19, 2019). All of a sudden, we witnessed a complete gush in this counter and within no time, stock prices started rebounding sharply from day’s low. More importantly, this upsurge was accompanied by huge volumes; providing credence to the move. Hence, in our sense, this would probably a start of forming a ‘Double Bottom’ pattern on daily chart. We recommend buying at current levels for a target of Rs 514 and the stop loss should be fixed at Rs 468.
Disclaimer: The analyst may have a position in the scrip mentioned above; the views given above are the personal views of the analyst.