A move above the 11,100 mark will lead to a breakout, which could then provide impetus to the ongoing rally. Looking at the overall development in last couple of weeks, we will not be surprised to see it happening soon. This will lead to some short covering moves first and then will also attract traders who have been waiting on the side-lines for this confirmation. In this scenario, the northward trajectory will continue towards 11,250-11,300 first and then may even extend up to 11,400-11,450. Hence, we continue with our recent optimistic stance and advice traders not to venture into taking any contra bets. The immediate supports for the index are placed around 10,945 and 10,890.
Amongst the sectoral indices, the Nifty Realty and the Nifty PSU Bank index witnessed outperformance during the week. The Metals and the Auto space too continued their winning streak for the second straight week. But the real show stealers were the bundle of stocks from the cash segment that soared as if there is no tomorrow. We expect these sectors along with the banking index to continue doing well in near term and hence, traders are advised to look for buying opportunities in stocks within these sectors.
Of late, in the initial part of the correction, the stock did not move as per our expectations but now the way it’s shaped up, things look a bit encouraging. Also, the entire metal space has shown life in last couple of weeks after easing off some developments on the global front; augurs well for the counter. Technically speaking, after consolidating around its multi-year lows, stock managed to traverse its daily ’20-EMA’ for the first time in last two months. This resulted into a confirmation of ‘Dragonfly Doji’ pattern on weekly chart, which has been confirmed now. We recommend buying this counter for a target of Rs 388 over the next few days. The stop loss should be fixed at Rs 354.
2. NSE Code – BHARAT FORGE
Along with the metal universe, the entire ‘Auto and Auto-ancillary’ seems to be gearing up for some relief. Although, it has done well in last couple of weeks, this counter was lagging a bit and now in last couple of weeks, it is trying to catch up with its peers. On the daily chart, stock has confirmed a breakout from the daily ’20-EMA’ and looking at the rising values of oscillators, we expect it to head higher in the forthcoming week. Going with all the above evidences we recommend buying this stock at current levels for a target of Rs 434 over the next few days. The stop loss can be placed at Rs 401.
Disclaimer: Views expressed are the author's own. He may or may not have positions in one or more stocks.