A rebound in market on the last day of the week ended May 19 fuelled hopes for further rise as the Nifty50 reclaimed 18,200, the crucial level to watch out for in the current week as well as where the maximum Call and Put open interest is placed at, though the index lost six-tenth of a percent to 18,203.4 last week.
The index has maintained higher highs formation for eight sessions in a row, which is a positive sign, while the momentum indicators RSI (relative strength index 14) at 59 levels on the daily charts, indicated a positive bias, and MACD (moving average convergence divergence) on the weekly scale gave a positive crossover above zero line.
The index has formed a bearish candlestick pattern with long upper and lower shadows on the weekly charts, indicating volatility, but on Friday, there was bullish hammer kind of pattern formation on the weekly timeframe, which is a potential reversal pattern.
Hence, if the index sustains above the 18,200 mark, then 18,300-18,500 can’t be ruled out in the coming days, with critical support at the psychological 18,000 mark, experts said.
“The recent correction was certainly expected after the decent run and the overall chart structure remains robust, with bulls firmly able to withhold the pivotal support,” Osho Krishan, Senior Analyst – Technical & Derivative Research at Angel One, said.
The 18,050-18,000 level was safeguarded firmly, showcasing the importance of pivotal support and is expected to act as a sheet anchor in the comparable period, he said. On the higher end, 18,400-18,450 is likely to act as the sturdy wall and a decisive breach would only trigger fresh longs in the system in future.
Mitesh Karwa, Research Analyst at Bonanza Portfolio, feels the coming week is of extreme importance for the market as it will decide the trend for the next leg. “The 18,200 levels are expected to act as a strong support zone and if held in the current week, the Nifty will start moving towards 18,500-18,600 levels,” he said, adding that the Nifty is trading above its 200 EMA at 17,636 indicates strength.
Let’s take a look at the top 10 trading ideas by experts for the next three-four weeks. Returns are based on the May 19 closing prices:
Expert: Vinay Rajani, CMT, Senior Technical & Derivative Analyst at HDFC Securities
Karur Vysya Bank: Buy | LTP: Rs 105 | Stop-Loss: Rs 98 | Target: Rs 125 | Return: 19 percent
The stock price has broken out from the bullish “Flag” pattern on the weekly chart. Price breakout is accompanied with rising volumes.
Oscillators and indicators have turned upwards on the weekly chart. Banking and financial space has been outperforming for last couple of months and same is expected to be continue.
The stock is placed above all important moving averages, indicating bullish trend on all time frames.
Shree Digvijay Cement Company: Buy | LTP: Rs 81.75 | Stop-Loss: Rs 74 | Target: Rs 95 | Return: 16 percent
The stock price has surpassed the crucial resistance of the previous swing highs on the weekly charts. It has been rising along with the rising volumes for last many weekly.
Cement sector has started outperforming recently. Indicators and oscillators have turned bullish on the weekly charts
Ujjivan Small Finance Bank: Buy | LTP: Rs 32.65 | Stop-Loss: Rs 29 | Target: Rs 40 | Return: 22.5 percent
After breaking out from the “Flag” pattern on the weekly charts, the stock has now managed to surpass the previous top resistance of Rs 32.50. Primary trend of the stock is bullish as it has been forming higher tops and higher bottoms.
Short term moving averages are trading above medium to long term moving averages, which is indicating the bullish momentum in the stock. Volume spike along with price rise was registered in the last week
Expert: Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities
Reliance Industries: Buy | LTP: Rs 2,442 | Stop-Loss: Rs 2,415 | Target: Rs 2,550 | Return: 4.4 percent
In the current uptrend, the stock has followed all the technical indicators, retracements and extensions, which is the rarest part of it. After hitting Rs 2,509 level, it moved back towards Rs 2,419 level which is a support level as a Supertrend study.
After hitting the support zone, it has formed a bullish reversal formation, which can help the stock move higher towards Rs 2,550. However, till the stock does not cross the recent high of Rs 2,509 then buying should be done with a target of Rs 2,500. The stop-loss is at Rs 2,415.
Ajanta Pharma: Buy | LTP: Rs 1,301.35 | Stop-Loss: Rs 1,200 | Target: Rs 1,550 | Return: 19 percent
Since February 2022, the stock has been consolidating between the trading range of Rs 1,130 and Rs 1,430, however, it was missing the higher bottom formation, which it has established in the last week.
Now till at least Rs 1,400, the journey to the upside would be smooth and above Rs 1,430 it will validate the formation of a double bottom.
On a weekly basis, the stock closed above the previous week’s high, making it a buy candidate. Buy at Rs 1,300 and Buy at Rs 1,250, with a stop-loss at Rs 1,200. On the upside, Rs 1,400-1,430 and Rs 1,550 seem achievable.
CESC: Buy | LTP: Rs 71.7 | Stop-Loss: Rs 67 | Target: Rs 85 | Return: 18.5 percent
It is an interesting formation of the trading range. Since 2017, the stock was trading broadly between Rs 60 and Rs 85. In extreme cases, it broke out of the trading range but again returned to the same level.
Recently, in March 2023, the stock reclaimed Rs 60 levels and bounced back. In the last week, the stock closed above the highest level of the last 5 weeks.
Based on the above formation, it could move towards Rs 85 with a major hurdle at Rs 80. The strategy should be to buy in two parts, at Rs 72 and at Rs 69, with a stop-loss at Rs 67 and for targets of Rs 80 and Rs 85.
Expert: Ruchit Jain, Lead Research at 5paisa.com
Bharti Airtel: Buy | LTP: Rs 805.75 | Stop-Loss: Rs 783 | Targets: Rs 825-842 | Return: 4.5 percent
The stock has recently seen a consolidation phase which seems to be a time-wise corrective phase. However, prices have started increasing gradually and are on the verge of a breakout from the consolidation.
The 20 DEMA (exponential moving average) is acting as a support and the RSI (relative strength index) oscillator is hinting at a positive momentum.
Traders can buy this stock in the range of Rs 805-800 for potential targets of Rs 825 and Rs 842. The stop-loss for long positions should be placed below Rs 783.
CESC: Buy | LTP: Rs 71.7 | Stop-Loss: Rs 68 | Targets: Rs 76-79 | Return: 10 percent
The stock prices consolidated in a range in last few weeks and formed an ‘Inverted Head and Shoulder’s’ pattern. During the week gone by, the prices have given a breakout from the neckline of the pattern.
The volumes were good on the breakout and the short term momentum also seems to be bullish.
Hence, short term traders can look to buy the stock in the range of Rs 72-71 for potential targets of Rs 76 and Rs 79. The stop-loss for long positions should be placed below Rs 68
Expert: Mitesh Karwa, Research Analyst at Bonanza Portfolio
3M India: Buy | LTP: Rs 23,911.90 | Stop-Loss: Rs 23,500 | Target: Rs 24,600 | Return: 3 percent
The stock has seen breaking out of a downwards sloping trendline on the weekly timeframe with a bullish candlestick, whereas the supertrend indicator is also indicating a bullish continuation trend which can be used as a confluence towards the bullish view.
On the indicator front, the Ichimoku cloud is also suggesting a bullish move as the price is trading above the cloud, conversion line and base line. Momentum oscillator RSI (14) is at around 62 on the daily time frame indicating strength by sustaining above 50.
Observation of the above factors indicates that a bullish move in 3M India is possible for targets upto Rs 24,600. One can initiate a buy trade in between the range of Rs 23,900-23,911, with a stop-loss of Rs 23,500 on daily closing basis.
Neogen Chemicals: Buy | LTP: Rs 1,570.7 | Stop-Loss: Rs 1,545 | Target: Rs 1,640 | Return: 4.4 percent
Neogen has seen breaking out of a pattern on the daily timeframe with a bullish candlestick and is also trading above important EMAs of 20/50/100/200 which indicates strength. On the indicator front, the supertrend indicator is indicating a bullish continuation, and momentum oscillator RSI (14) is at around 57 on the daily time frame indicating strength by sustaining above 50.
The Ichimoku Cloud is also suggesting a bullish move as the price is trading above the conversion line, base line and cloud on the daily timeframe.
Observation of the above factors indicates that a bullish move in Neogen is possible for targets upto Rs 1,640. One can initiate a buy trade in the range of Rs 1,565-1,570 with a stop-loss of Rs 1,545 on daily closing basis.
Shree Digvijay Cement Company: Buy | LTP: Rs 81.75 | Stop-Loss: Rs 74 | Target: Rs 93 | Return: 14 percent
Shree Digvijay Cement Company has seen breaking and sustaining above a consolidation after 15 months with a big bullish candlestick on the weekly timeframe and above average volumes.
The supertrend indicator is indicating a bullish continuation which supports the bullish view. Momentum oscillator RSI (14) is at around 78 on the daily time frame indicating strength by sustaining above 50 and the ichimoku cloud is also suggesting a bullish move as the price is trading above the conversion and base line.
Observation of the above factors indicates that a bullish move in Shree Digvijay Cement Company is possible for target upto Rs 93. One can initiate a buy trade in between the range of Rs 81-81.8 with a stop-loss of Rs 74 on daily closing basis