Nifty near recent highs, banking space needs to step up now
We had a good broad based rally during the second half of the week and, more importantly, some of the event-sensitive stocks had shown bottoming formation. Traders can certainly keep a watch on such potential propositions, who can certainly give some extended moves. Clearly, Auto and Metal who were hammered down brutally over the past few months have finally shown stupendous moves. The only disappointing factor in last week’s rally was the relative underperformance from the banking index. Although, it showed sign of coming out of congestion zone but it is certainly lacking the kind of flamboyance it generally shows in every robust rally. Hence, if Nifty has to extend the rally towards 12,000 or beyond, the banking space needs to step up and prove its significance.
View – Bullish
Last Close – Rs. 541.20
The paint stocks are on a roll since last three months and in fact, some of the marquee names like Asian Paints and Berger Paints have given stupendous moves. They are still not done with it, and continue with their gravity defying journey with no sign of weakness yet. ‘KANSAINER’ is also not behind as we have been witnessing decent moves in this stock. The relative performance may be lacking with compared to larger names but now the way charts are shaped up, we expect catch up rally to unfold. Prices have finally broken above 520, which thrice acted as stiff resistance in last one year. The said breakout is supported with a good increase in volume and looking at all the above evidence we sense a strong upside in the counter in the near term. We recommend buying this stock at current levels for a target of Rs.580 over the next 14 sessions. The stop loss should be fixed at Rs.518.
NSE Code – GODREJAGRO
View – Bullish
Last Close – Rs. 517.75
On the daily chart, we are witnessing a classical bullish pattern breakout known as ‘Inverse Head N Shoulder’. The said breakout is witnessed with a big bullish body candle and sizable increase in volume, providing credence to our optimistic view. In addition, we are witnessing a strong close above the higher end of Bollinger band which suggests a period of strong trending up move after its recent consolidation. Hence, we recommend buying this stock at current levels for a target of Rs.593 over the next 14 sessions. The stop loss should be fixed at Rs.477.
Disclaimer: Views expressed are the author's own. He may have positions in one or all of the above mentioned stocks.