Nifty outlook and few trading ideas by Sameet Chavan, Chief Analyst- Technical & Derivatives of Angel Broking:
Time-wise pain continues, focus on individual stocks
Markets are undergoing a typical phase during which traders struggle to find clear direction in the index. At such times, they tend to find alternatives in individual stocks as the picture can be much clearer than the benchmarks. This is what we experienced in the concluded week. As far as index is concerned, last day of the week was slightly encouraging.
Since last couple of weeks, the Nifty has been vacillating within the boundaries of a small ‘Triangle’ pattern. Due to first couple of day’s action, prices precisely tested both ends of the pattern and eventually on Friday, managed to traverse the upper range at 9940. This ongoing optimism may push the index towards 10000 – 10040. But, looking at the weekly chart, we continue to mention that the market has slipped into consolidation mode with a short term perspective and hence, traders should ideally avoid trading aggressively in such moves. Rather, the way individual stocks have shown their outperformance is quite encouraging and hence, one should look to capitalize on such opportunities rather than focusing on benchmarks. For the coming week, 9920 – 9850 would be seen as immediate and a crucial support zone.
ICICI Prudential Life Insurance – Bullish
Last Close – Rs 443.35
We witnessed a good price appreciation in this stock immediately post its inception. However, the counter slipped into a consolidation mode after posting a new high of 505.79 in the month of July. The stock spent some time around 420 – 425 as the key short term moving average (89) provided a rock solid support in the recent correction. On Friday, we witnessed a good positive traction along with tremendous buying interest in the stock. Considering the ‘u-turn’ in daily ‘RSI-Smoothened’, we expect the stock prices to resume its higher degree uptrend. Hence, we recommend buying this stock at current levels for a target of Rs.469 over the next 14 – 21 sessions. The stop loss now should be fixed at Rs.422.
GAIL – Bullish
Last Close – Rs 384.15
This stock has been a laggard since last four months within the ‘Oil & Gas’ space. Recently, we witnessed several attempts to move out of the congestion zone; but, every attempt got sold into. During the previous session, we could see yet another effort to do so; but this time it is backed by decent volumes and hence, we are expecting the stock to surpass this hurdle soon. In addition, the placement of momentum oscillators on daily time frame is encouraging, providing credence to this move. We recommend buying this stock at current levels for a target of Rs.410 over the next 14 – 21 sessions. The stop loss should be fixed at Rs.377.
Hindustan Zinc – Bullish
Last Close – Rs 303.15
Clearly, the metal stocks have been the flavor of this week and in fact, they have been on a roll since last many months; courtesy to positive developments in metal space on the global front. This stock has now started to show its presence as we saw a decent up move to close at record highs. On Friday, the stock managed to surpass the psychological barrier of 300 which has been acting as a sturdy wall since last few months. Looking at the volume activity, we expect the stock to continue enjoying its bull run. Thus, we recommend selling this stock at current levels for a target of Rs.324 over the next 5 – 10 sessions. The stop loss should be fixed at Rs.297.