We saw some sell off in pharma, IT companies as well as metal companies. But we are of the view that after falling to their important support areas, we can again expect a rebound in the coming week, said Shrikant Chouhan, Executive Vice President – Technical Research, Kotak Securities.
We have not managed to push through the 14,700 level quite convincingly. What is the texture of the market telling you?
The markets are very clearly exhibiting rangebound sort of activity. If we look at global markets, they are seeing a lot of difficulty sustaining at higher levels. With the way they have fallen in the last few days, one thing is very clear. It is now very difficult for them to cross their previous high.
Since the last two months, we are finding it a lot difficult to sustain above the 15,000-mark. On the downside, the market is seeing very good support at 14,500-14,400 levels. I am of the view that the market is not going to cross the 15,000 level confidently and we are going to see sideways activity. The strategy should be to look at adding a long position.
On the other hand, in case there is any selloff, I don’t expect the market to fall so easily below the mark of 14,400. If there is any correction, certainly we should look at adding Nifty as well as Bank Nifty to our trading portfolio. Stock-specific action is there and those stocks that have not performed in the last one and a half month like Reliance Industries, ITC or even L&T have started performing. So yes, we are going to see stock-specific activity in the market and the strategy should be to look at buying on dips.
On the charts of
and , what next after the big breakouts that we saw on Friday?
Both the charts have broken their crucial resistance level. In fact, they were consolidating below their important areas of resistance and if we just go through with the activity of the last two to three weeks, then they were just failing to cross the levels of Rs 2,650 on Asian Paints and nearly Rs 700 on UPL.
On Friday, both the stocks broke these levels on the back of results. While looking at the chart of UPL, one thing is very clear that now the stock has entered into new territory and is heading towards Rs 720 levels. We also like Asian Paints because the stock was consolidating and it has formed a triangle formation. It is heading for minimum Rs 3,000-3,050 on the higher side. So we have a buy view based on the charts.
What stocks are on your radar?
In the current week, we saw some profit taking. We saw some sell off in pharma, IT companies as well as metal companies. But we are of the view that after falling to their important support areas, we can again expect a rebound in the coming week and that is why we should focus on stocks like JSW Steel, which is currently trading at Rs 707-710 levels. We can keep stop loss at Rs 690 and can again expect Rs 740 on the higher side.
We also like Lupin Laboratories. There also we saw significant profit taking after hitting the levels of Rs 1,230-1,240. But around Rs 1,175-1,180, it is a very strong bid to buy and hold. We can keep the stop loss at Rs 1,140 and expect Rs 1,250 or Rs 1,270 on the higher side.