“We will hence not be chasing prices right away on Monday, but instead wait for a pull back that will hopefully end before 24863. Major downside markers may be placed at 24640.”
Edited excerpts from a chat:
Nifty ended the week 1% higher after three days of positive endings. What’s the likelihood of the market maintaining the momentum on the upside after consolidating in the previous two weeks?
Since the second half of April, Nifty had faced two stages of consolidation, the latter one having stretched over three weeks. Friday’s spike has taken us to the upper band of this range. Nifty appears well primed to stage a breakout and embark on the 25460-26200 objective that we have been eying for the last fortnight. That said, neither has the Bollinger band widened, nor has momentum indicators started showing strength to support a vertical rise. This reluctance partly stems from Nifty lagging Bank Nifty, and even the SMIDs. We will hence not be chasing prices right away on Monday, but instead wait for a pull back that will hopefully end before 24863. Major downside markers may be placed at 24640.
Nifty Bank has been outperforming and even hit fresh record high even when Nifty is still 5% away from September peak. How would you trade the index in the week ahead?
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Our eyes are on 58400, but four hours of consolidation after Friday’s initial rise point, point to the fact that we are not in a one way street yet. Adding reason to concern, RSI is still below the levels seen when Bank Nifty hit April’s peak. This divergence does not call for a reversal yet, but a cautious approach is warranted at the start of the week, with downside marker placed at either 56400 or 55920.
With momentum sustaining, small caps are outperforming. Do you see chances of some correction creeping in the near term?
The outperformance in the SMIDs was visible, as more of them rose above previous week’s highs when compared to Nifty 50 constituents. While only 50% of Nifty 50 stocks closed above their respective 20 day SMA on Friday, 74.8% of small cap constituents closed above this benchmark on Friday. But while 50% of Nifty 50 stocks closed within the day’s high on Friday, only 10% of small cap 250 constituents did so, suggesting that there is caution floating around, and a consolidation may be expected before a vertical rise unfolds.Cochin Shipyard shares have been on fire and ended the week up amid positive news flow. Are you seeing overbought signs on the charts?
The vertical rise in the last few days had catapulted Cochin Shipyard’s prices far beyond two standard deviations from mean, calling for caution. The red hammer candlestick pattern formed on Friday, which is usually a bearish reversal pattern adds to this conjecture. With this in the backdrop, we would be more comfortable with re entry, if a dip unfolds to either 2345 or 2176.
Give us your top ideas of the week:
AXISBANK (CMP:1194)
View: Buy
Target: 1250 – 1340
SL: 1098
The stock formed its largest green candle since April 22, rebounding sharply from the Supertrend support at 1,146. On the daily chart, the SMIO histogram is showing signs of exhaustion at lower levels and is on the verge of crossing above the zero line—indicating a potential trend reversal.
We expect the stock to move toward 1,250 and 1,340 in the near term. All long positions should be protected with a stop-loss placed below 1,098.
SHRIRAMFIN (CMP:688)
View: Buy
Target: 820
SL: 617
After nearly two weeks of narrow-range trading, the stock has finally broken out decisively. It has formed a bullish Marubozu candle and witnessed a Supertrend breakout, signaling strong upward momentum.
Additionally, the SMIO has crossed above the zero line on both the daily and weekly charts, reinforcing the bullish outlook and pointing toward a potentially larger move in the coming weeks.
We expect the stock to move toward 820 in the near term. All long positions should be protected with a stop-loss placed below 617.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
