11,549 becomes a sheet anchor for Nifty
Last week, our benchmark index clocked new record high of 11,856.15. However, it turned out to be a formality as there was no follow-up momentum seen to extend the rally. Last Friday, the markets gave a hint of profit booking and similar sort of decline was seen on the first day of the week gone by as well. Some macro factors like, Brent crude rising beyond its key levels of $73-74 weighed down heavily on traders’ sentiments. Fortunately for us, the damage was not as severe as it looked like once. Due to some smart recovery in the latter half, Nifty managed to reclaim the 11,700 mark at the end of the week.
There is a famous saying, 'all’s well that ends well', and its fits perfectly with this week’s price development. Firstly, we successfully managed to defend the key support of 11,549 and then went on to close well inside the safe territory by reclaiming the 11,700-mark. Now, at this juncture, we do not have signals that will provide us a proper trade setup. But since the broader trend remains bullish, we continue to remain upbeat on the market as long as it holds 11,549, convincingly. On the higher side, 11,800 followed by 11,856 are the levels to watch out for. If we see any renewed buying interest in some of the heavyweight constituents, we would expect index hitting fresh highs very soon. Till the time, the consolidation continues in the range of 11,856 – 11,549.
Traders are advised not to take aggressive positions till the time we remain trapped in the mentioned range. At such time, a stock centric approach becomes the more pragmatic approach.
1. NSE Code – MCX
View – Bullish
Last Close – Rs. 839.20
Justification – This stock has been consolidating since last 5–6 months and was struggling to cross its sturdy wall around Rs 820. During the early part of March, stock prices started giving sharp rallies with more than average daily volumes consistently. On Friday, we finally saw this stock surpassing the multi-moth hurdle of Rs 820 with some authority; courtesy its quarterly numbers which clearly propelled this move. More importantly, this price development was backed by humongous volumes, providing credence to the rally. Hence, we recommend buying at current levels for a target of Rs 925 and stop loss should be fixed at Rs 790.
2. NSE Code – Grasim
View – Bullish
Last Close – Rs 913.45
Justification – Of late, the entire ‘Cement’ pack is on a roll and this week, excellent quarterly numbers from ‘Ultratech Cement’ provided impetus to the rally. Grasim being the holding company of the Ultratech Cement had a ruboff effect of this gigantic move. In this course of action, we finally witnessed a breakout from the ‘200 day SMA’ around Rs 880 with substantial rise in volumes. Due to some profit booking, the stock has come off a bit. But we would rather interpret this as a good buying opportunity. Thus, we recommend buying at current levels for a target of Rs 965 and the stop loss should be fixed at Rs 886.
Disclaimer: The analyst may have a position in the scrip mentioned above; the views given above are the personal views of the analyst.