With reference to the previous article, we expected index to march towards the 161% (Golden Ratio) reciprocal retracement level (10482) of the recent down move. Yes, there is no sign of weakness on charts; but, considering the importance of this Fibonacci ratio, we advise some profit booking around it. Although, the recent underperformance from the banking index came to end this week after Bank Nifty soaring to record highs on Wednesday, we would expect some consolidation in our benchmark indices now.
For the coming week, 10482-10500 levels would be closely watched in the upward direction; whereas, the immediate support lies in the range of 10,383-10,311. At this juncture, traders are advised not to take aggressive positions and should rather keep focusing on individual stocks with a proper exit strategy. As far as sectoral view is concerned, we would expect ongoing buzz to continue in ‘Pharmaceutical’ as well as ‘PSU’ banking space. One should also keep a close track of ‘Midcap IT’ counters that are likely to do well in the forthcoming week.
Last Close: Rs 675.75
We have been quite upbeat on this stock since last couple of weeks. In the week gone by, the stock finally started moving as per our expectations. Technically speaking, it has managed to convincingly traverse the ‘200-day SMA’ placed around 660. In addition, the ‘RSI-Smoothened’ entered the overbought territory by crossing its threshold level of 70 in the upward direction. This development would provide some impetus for next up move according to us. Hence, we recommend buying this stock at current levels for a target of Rs.718 over the next 14-21 sessions. The stop loss now should be fixed at Rs.648.
2) Sun TV
Last Close: Rs 881.55
Of late, we witnessed some consolidation in this stock and finally, the stock prices broke out from the falling trend line last Friday on an intraday basis. The volume activity picked up during this move; indicating decent buying interest in the stock. As expected, the stock prices did well during the week and have managed to confirm a decisive breakout from the recent hurdle of 860. One can buy this stock on a minor decline around Rs 674 for a target of Rs 905 over the next 5 to 10 sessions. The stop loss should be fixed at Rs 856.
Disclaimer: The analyst may have positions in any or all the stocks mentioned above.