“On the weekly chart, the stock had found support at the rising trend before the recent rally. On the daily chart, the stock has given a consolidation breakout. Suggesting a rise in optimism around the stock. Over the short term, the stock might move towards Rs 4,400. On the lower end, support is placed at Rs 4,100,” Rupak De, Senior Technical Analyst, LKP Securities, said.
Edited excerpts from a chat on Budget expectations and trading ideas for the week:
What is the best strategy to trade the market in the pre-Budget week?
In the pre-budget week, volatility might spike due to varied expectations across different sectors. Stocks within budget-sensitive sectors might see increased interest. However, if the budget fails to meet expectations, those particular stocks could experience significant corrections. Therefore, it’s crucial to avoid leveraged trading and to use strict stop losses.
Friday’s session was all about IT stocks. Does the fresh upmove look sustainable in the new week and whether it can raise short-term targets for Nifty traders as well?
IT has suddenly bounced back into the game after TCS’s quarterly earnings boosted sentiment in the sector. A consolidation breakout is visible on the daily chart of the Nifty IT index, indicating increased optimism. In the monthly time frame, it has formed a cup and handle pattern breakout. In the short to medium term, sentiment might remain strong, with the possibility of significant upside gains in the index, which could eventually lift the Nifty higher along with it.
Would you take a long bet on TCS following the sharp upside seen on Friday or do you think the stock is now at overbought levels?
On the weekly chart, the stock had found support at the rising trend before the recent rally. On the daily chart, the stock has given a consolidation breakout. Suggesting a rise in optimism around the stock. Over the short term, the stock might move towards Rs 4,400. On the lower end, support is placed at Rs 4,100.
Nifty Bank ended the week with a 1% loss. What are the targets now?
On the last day of the week, the Bank Nifty remained volatile throughout the day before closing flat. Sentiment might continue to favour the bulls, as the index appears to have found support at the 21 EMA on the daily timeframe on Thursday. The buy-on-dips strategy looks best from the current perspective until it falls below 21,700. On the higher end, resistance is visible at 52,800; above 52,800, the index might continue its upward journey towards 54,000.
News related to earnings as well as Budget expectations will lead to stock-specific movements. Which ones would you like to take a bet on during the week?
Stocks in the infra, power, railways, housing, defense, and fertilizer space are likely to remain in the buzz ahead of the budget. Focusing on the stocks might be a good idea.
Are there any stocks under your radar that look overbought and why?
In a market that has experienced a significant rally recently, many stocks might be trading in an overbought zone. However, just being in the overbought zone may not be a good reason to exit those stocks as long as they remain in momentum.
RVNL was the star of the week. Tell us what momentum traders should do now?
Definitely, RVNL remained the star of the week after a stellar rally. Even after this staggering rally, the stock has not lost its momentum. In fact, the stock has been seen consolidating, which is very common when a stock is preparing for a longer-term bullish trend.
Give us your top ideas for the week.
Buy INDIAN BANK 559 TGT 600 SL 542
After the consolidation breakout on the daily timeframe, the stock looks promising for the short term. The price has been sustained above the critical moving average. The RSI is in a bullish crossover and rising. On the higher end, the stock might move towards 600, while support is placed at 542.
Buy BSOFT 731 TGT 800 SL 700
The stock has given a downward consolidation breakout on the daily chart. The trend remains positive as it has been sustained above the critical moving average. The daily RSI is in a bullish crossover. On the higher end, the stock might move towards 800, while support is placed at 700.
Buy IRFC 216.50 TGT 230 SL 208
The stock has finally moved up after a consolidation breakout on the daily chart. The trend remains positive as it has been sustained above the critical moving average. daily RSI is in a bullish crossover. On the higher end, the stock might move towards 230; while support is placed at 208.