Considering Friday’s action, a possibility of some relief in the forthcoming week cannot be ruled out. In this scenario, 11,350 – 11,450 can be retested.
Market participants were completely dejected with the Budget, and this clearly reflected in the price action thereafter in the week gone by.
The overall chart structure looks distorted and hence, till the time we are below 11,550 – 11,700, the bears remain in the dominating position.
As far as supports are concerned, 11,200 seems to have earned some respect and below which we can see a sheet anchor support of ‘200-day SMA’ which now coincides with May's low of 11,108.30.
Considering the action on July 26, a possibility of some relief in the forthcoming week cannot be ruled out. In this scenario, 11,350 – 11,450 can be retested.
But, as highlighted above, one needs to be agile and should probably take some profit off the table at least on momentum trades.
In the forthcoming week, we expect stock-specific action to continue and should ideally avoid aggressive positions. We reiterate that the ongoing decline provides excellent opportunity to grab some of the marquee names that saw gravity-defying moves for a year and are finally undergoing some price correction.
Here is a list of top two stocks which could give up to 8 percent returns in the next three to four weeks:
Sun TV Network: Buy| LTP: Rs 491.05| Target: Rs 530| Stop Loss: Rs 469| Upside 8 percent
Media stocks displayed tremendous resilience in the recent broader market destruction. This stock too attracted strong buying interest around its multi-year support lows of Rs 455 – 450.
On July 26, we finally witnessed the first sign of revival as the stock prices surpassed recent hurdle of Rs 480 on a closing basis. Also, we have been observing a positive divergence in ‘RSI-Smoothened’ oscillator on the weekly chart since the last couple of weeks.
The daily, as well as weekly charts, look so encouraging and hence, we expect a decent in coming days.
Hence, we recommend buying this counter for a target of Rs 530 and the stop loss should be fixed at Rs 469.
Dr Reddy’s Laboratories: Buy| LTP: Rs 2704.95| Target: Rs 2,780| Stop Loss: Rs 2,615| Upside 3 percent
The entire pharmaceutical space was bucking the trend throughout this week, and in fact, some marquee names within this space had a stupendous run since last few days.
On July 26, we witnessed a breakout from the cluster of resistances for this counter and with this; the daily chart exhibits a breakout from the ‘Bullish Cup and Handle’ pattern.
Considering this development, we expect some catching up from this stock in days to come. Thus, traders can look to initiate longs on declines around Rs 2,675 for a target of Rs 2,780 and the stop loss should be fixed at Rs 2,615.
MORE WILL UPDATE SOON!!
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