Weekly market outlook and top two trading ideas by Angel Broking

Stock calls and market outlook by Sameet Chavan, Chief Analyst- Technical & Derivatives, Angel Broking Ltd

Some reality check post the event, bias still remains positive

The eventful week was followed by a head start on Monday as we once again started our march towards the 12,000 mark. During the week, we did manage to reclaim this milestone but somehow were unable to sustain at higher levels. In fact, on Friday, everything looked hunky dory and we were all set to hit fresh record highs. But suddenly from nowhere, top index heavyweights took a complete nosedive and within a blink of an eye, we were nearly 200 points off in Nifty. 

Fortunately, this selling was absorbed by buyers awaiting at lower levels and hence, a recovery thereafter pushed index above 11,900 to register a highest ever weekly close.

During the week, we clearly witnessed a consolidation and this is quite evident as the overall uncertainty is behind us post the favourable election verdict. In fact, it’s a typical characteristic of a market, which never gives easy money when the trade becomes obvious and is known for giving sharper moves when they are least expected. 

Now, as far as levels are concerned, 11,600-11,500 has become a near term base and for the forthcoming week, 11,840 can be seen as a sacrosanct level. Till the time, we are above these levels, the bias remains positive and we expect a gradual march towards 12,050-12,200. However, having said that one needs to be very fussy now while selecting a stock as we saw on Friday, we cannot just become complacent; because in between we may experience such reality check.

During the week, the IT index had an encouraging move after recent underperformance. In fact, it was the only heavyweight pocket who could post steady gains throughout the week. Apart from this, there is nothing much to comment on the sectoral front and hence, we need to closely observe how individual pockets perform in first couple of days during this week, which would give some idea about potential movers. 

Stock Recommendations:

NSE Code – Goderj Consumer

View: Bullish

Last Close: Rs 688.05

Justification – After undergoing a difficult time for nearly 6-8 months, we saw the first sign of revival on Friday. On the daily chart, the stock price has broken above last one month’s higher range which was acting as a stiff resistance and now indicates a change in polarity. The said, breakout is supported with a good increase in volume and strong bullish candle. In addition, prices have closed above 89-EMA (exponential moving average) which indicates that the short- to-medium term trend has turned positive. Looking at all the above evidence, we sense a strong upside in the near term. Thus, we recommend buying at current levels for a target of Rs 760 and the stop loss should be fixed at Rs 648.

NSE Code – Raymond

View: Bullish

Last Close: Rs 828

Justification – Recently, we witnessed a sheer outperformance from this traders’ favorite high beta mid cap name. The stock remained sideways with no real participation in the broader market destruction. Last Friday, when midcap universe started showing signs of revival, this stock showed its supremacy by clocking colossal move to surpass its recent congestion zone convincingly. Looking at the volume activity and other trend following indicators which are pointing upwards, we expect the stock to give decent move in days to come. In the week gone by, it has come off a bit which provides better opportunity to go long. Thus, we recommend buying at current levels for a target of Rs 897 and the stop loss should be fixed at Rs 804. 

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Disclaimer: The analyst may have a position in the scrip mentioned above; the views given above are the personal views of the analyst.