This week we saw a bit of a drop coming for the Nifty, but come on where do you see Nifty? Do you see it breaking out of that range and decisively breaking above 17,300? What else do you read in the charts with regards to the benchmarks in particular?
The market hasn’t gone anywhere for a while now. For reference, in October of last year we were at 17,000, in March and April of this year also we were at 17,000, and today we are at 17,200 – it has been. Short term, last week we were at 17,100-17,200 – still in the same place. So in terms of the trend, some consolidation has been happening for quite some time. But, if yesterday’s rally in US markets is followed by a move past 30,450 over the next two weeks and similarly once 17,400 on Nifty is over, momentum kicks in. Game.
For now, the bias is still positive until we hold that 16,750-16,800 mark and the momentum shifts to extreme positivity at around 17,400. So right now we are still at mid-range, awaiting further breakouts. But, at these prices, it is a risk reward “buy”, in which you hold a stop-loss at 17,080, take a risk of 100 points and go long on the Nifty and watch the move eventually above 17,400 towards 17,600-17,800.
What are your best bets for the coming week?
I continue to like the banking space, where the top two picks come from. The first is a “purchase” on Axis Bank. The stock is preparing for a break above that 820 mark, which has been the resistance for one, two, three years. Once this breakout comes into play, you are looking at a target price of Rs900 in the short to medium term. So I like the stock at current levels and add more above 820-825.
Second, there is a “buy” on RBL Bank, which is a bit early in terms of a breakout. The biggest breakout is for the stock above the 130 levels and the stock has seen a correction from the 650 levels a few years ago to the sub 100 levels in June this year. In this month of June it was below March 2020 prices and from there it made a comeback. The recent top was around this 130-135 mark, once crossed the breakout should be more significant.
Moreover, over the last three or four days, it has shown good resistance even in a falling market. So a stop-loss at 121 with an initial price target of Rs 140. But this could be a surprise in the medium term.
(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)