“The underperformance of BankNifty is preventing Nifty from moving higher; for Nifty to break on the higher side, BankNifty must start performing. The undertone remains bullish, and one should adopt a buy approach on a breakout above 23500, targeting 23,800-24,000,” he says.
Edited excerpts from a chat:
Nifty has rallied non-stop for the last 4 days to touch fresh record highs but has been trading within a broad range of 23300-23500. Do you see higher chances of a strong move on either side of the band in the week ahead?
Nifty is stuck in a narrow range between 23300-23500, and a break on either side will lead to trending moves. The underperformance of Bank Nifty is preventing Nifty from moving higher; for Nifty to break on the higher side, Bank Nifty must start performing. The undertone remains bullish, and one should adopt a buy approach on a breakout above 23,500, targeting 23,800-24,000.
How would you trade Nifty Bank in the holiday-shortened week?
For Nifty Bank, one should wait for a breakout confirmation above the 50,200 mark. If the index breaks above 50,200, it will open the path to 51,000 on the upside, with strong support at 49,800. However, if the index fails to surpass this resistance zone, it may enter a sideways to mild downward move to the 49,000 mark.
How does the momentum look like for sugar and ethanol-related stocks like Praj Industries and Shree Renuka Sugars?
The entire buzz in the sugar sector began after the announcement of increasing the ethanol mix from 15% to 20%, which injected new momentum into the space. The outlook is positive for the near to short term, and stocks like Praj and Renuka Sugar are expected to perform well. Praj has broken its previous swing high of 650, which will now act as support in case of a decline. Investors can buy into the sugar sector in a phased manner due to its volatile nature.
Sustained buying has been seen in PSU stocks. Any names that you would take a bet on in the week?
Following the election outcome, there has been significant stability across the entire PSU pack, with some stocks surpassing their previous swing highs. One stock to highlight is CONCOR, which shows a strong technical chart setup with higher highs and higher lows intact on the daily chart. The stock has experienced volume-based buying in recent trading sessions, clearly indicating bullish momentum. Support for the stock is placed at 1060, with potential upside targets of 1240 and 1400.
Shares of Titagarh Rail were the top performer in the week with a 29% return. Do you see some more steam left as rail stocks may remain in focus ahead of Budget preparations?
The outlook for the entire railway sector appears positive, but investors should adopt a buy-on-dips approach. Titagarh has experienced delivery-based buying this week, indicating visible long-term buying interest. The stock has surpassed the resistance level of 1300, and dips toward the support would present an ideal opportunity to go long.
Give us your top picks for the week.
BUY PPL PHARMA AT 157, SL-150, TGT 180/200
RATIONALE: The stock is on the verge of a breakout from its consolidation phase on the daily chart. The momentum indicator RSI is sustaining above the level of 60, indicating strong momentum. The stock is trading above its short-term moving average of 20 DMA, which is placed at 150 and acts as support in case of any declines. Once the stock surpasses the mark of 160, it is likely to see an acceleration of momentum towards the 180/200 mark.
BUY NYKAA AT 170, SL-160, TGT-180/200
RATIONALE: The stock is showing early signs of bottom formation on the long-term chart, evidenced by volume-based buying. It has taken strong support at its 100DMA and 200DMA, confirming the bottom formation. Additionally, the momentum indicator RSI is on the verge of a breakout from a falling trendline on the daily chart, which will accelerate momentum going forward.
BUY CONCOR AT 1135, SL-1060, TGT-1240/1360.
RATIONALE: The stock is trading in a strong uptrend, maintaining higher high and higher low formations on the daily chart. It has surpassed its 20DMA with significant volumes, indicating a bullish undertone. The lower-end support is placed at 1060, which will act as a cushion in case of any declines.