“We will look to add longs on Monday, on dips, which should not exceed 22045, while a direct fall below 21975 will re-activate bearish moves, this time aiming for 21500,” says Anand James, Chief Market Strategist, Geojit Financial Services.
Edited excerpts from a chat:
Nifty ended the week with a cut but do you think the buying seen during the second half of Friday’s session is a positive indicator for bulls?
It certainly was a bearish rejection, and for all we know, it has invalidated the prospects of a plunge that was staring at 20300 at one point. That, however, is not to say that a vertical rise is to follow the rally that ensued on Friday. We have yet another hurdle at 22350 which is likely to let bears regroup. We will look to add longs on Monday, on dips, which should not exceed 22045, while a direct fall below 21975 will re-activate bearish moves, this time aiming for 21500.
With the Q4 numbers failing to give any boost, do you see more pain in the Nifty IT index in the week ahead given the trade set-up?
IT contributes around 16% to Nifty50 and was the second biggest contributor to Nifty50’s fall this week. Infy, HCL Tech, Tech Mahindra, LTIMindtree and Wipro were the big laggards falling an average of 4.5% post-earnings numbers from biggies. 50% of the IT stocks have moved into the oversold region compared to 10% last week, while 60% of the stocks are trading below the 30-day low. Expect short-term pull back but medium-term still vulnerable for more dips. TCS, HCL Tech, Wipro, LTIM, and Tech Mahindra to lead.
RIL shares would be in focus on Monday due to earnings. What should be the trade set-up for the day?
Though RIL has seen significant cuts during the recent broad market sell-off, the stock has been on a long-drawn consolidation that has now extended almost three months, which is a sign of distribution. The psychological level of 3000 has been a put-off, and we do not see the present setup favouring a vertical and sustained up move, even if a direct rise above 3000 unfolds.
Among all the winners of the week like Just Dial, Exide Industries, Amara Raja Energy, Hitachi Energy, which ones do you think have enough meat left going forward?
While Exide and Amara Raja Energy are forming patterns that should stay the course for the long run, Hitachi Energy appears to retain some more large strides, but which are likely to fizzle out quickly. Our bet is on Just Dial which appears to have a better risk reward.
Give us your top trading ideas for the week.
Raymond (CMP: Rs 2012)
View : Buy
Targets : Rs 2080 – 2150
Stop loss : Rs 1940
The stock has been in a very tight range since the beginning of this month and has seen a range breakout today. A Bullish Marubozu candle on the daily timeframe and a supertrend breakout in the weekly timeframe all point towards the start of a short to medium-term upside in the stock. We expect the stock to move towards Rs 2080 and Rs 2150 levels in the near term. All longs may be protected with stoploss placed below Rs 1940.
Berger Paints (CMP: Rs 504)
View : Buy
Targets : Rs 524 – 540
Stop loss : Rs 486
The stock has been on a dip since September 2023 and has corrected around 17% since then. In the monthly time frame, the stock has corrected close to 61.8% Fibonacci retracement level of 2023 low and high which is warranting a short-term bounce back. Furthermore, the stock has moved into the oversold region in the daily timeframe supporting our assumption. We expect the stock to move towards Rs 524 and Rs 540 in the near term. All longs may be protected with stop loss placed below Rs 486 levels.
