Aamar Deo Singh, Head Advisory, Angel One Ltd said the domestic equity market will continue to consolidate in the coming week, with a strong tussle between the bull camp, and the bear camp, but there will be stock-specific action.
In an interview with ETMarkets’ Kshitij Anand, Singh said Open Interest (OI) data in the current April series for Nifty50 indicates a short built-up, and signals from technical indicators suggest that Nifty is likely to trade in the range of 17,250 – 17,750. Edited excerpts:
Q) In the holiday-shortened week for the market, bears remained in control and we saw some pullback on Wednesday. What led to the price action?
A) The market continued to trade sideways for the past few trading sessions on the back of inflationary concerns, higher crude oil prices, and continuing Russia Ukraine conflict.
However, with corporates coming out with quarterly results in the coming weeks, it will play a crucial role in deciding the trend of the broader market.
The curtailed week saw the benchmark indices Nifty and Bank Nifty correct by 1.74% and 0.76%, respectively. Also, Wednesday being the weekly expiry day, led to increased volatility either way.
Q) What is your call on market for this week? Any key levels that investors should watch out for Nifty and Nifty Bank?
A) The market will continue to consolidate this week with a strong tussle between the bull camp and the bear camp.
Open Interest (OI) data in the current April series for Nifty50 indicates a Short build-up, and signals from technical indicators suggest that Nifty is likely to trade in the range of 17,250 – 17,750.
A few technical indicators such as moving averages and ADX, a trend determination indicator, points towards a sideways play next week.
Only a breach above or below the mentioned range could trigger a sharp move in either direction. As far as Nifty Bank is concerned, 36,600 – 37,800 is the range to watch out for this week.
Q) What is brewing in Bharat Dynamics – the stock has risen more than 30% in the last 5 days. How should investors approach if they plan to put fresh money?
A) Bharat Dynamics has witnessed a spectacular rally so far this year. It is up by almost 89% year-to-date (YTD) with major gains coming in April.
Whenever we witness such sharp up moves in any stock, where the angle of ascent is greater than 45 degrees, one needs to be cautious on entry into such stocks.
However, the charts of Bharat Dynamics continue to display strength with the uptrend remaining intact; hence, any dip in prices towards the Rs 600-650 zone, could be an ideal buying opportunity, with major technical support now seen around Rs 540 levels.
Q) Kolte Patil Developers formed a Death Cross on charts on April 12, Trendlyne data showed. It is trading below crucial moving averages. A value pick or investors should ideally stay away – what do you recommend?
A) Kolte Patil is clearly a range play in the current scenario with most technical indicators pointing towards consolidation in the stock.
The stock has a well-defined support zone around Rs 240-250, which could be a good level for entry as the stock has consistently held onto these levels. On the upside, Rs 310-320 should act as a crucial resistance zone.
Those interested in range play could get some good opportunities in the mentioned range as the stock, even on long-term charts, does not display any trend build-up at present.
Q) What are your top 3-5 trading ideas for the coming 3-4 weeks? Please give a small rationale along with the target and stop-loss?
A) Here are a few trading ideas for the coming 3-4 weeks:
RailTel Corporation of India: Buy at Rs 108| LTP Rs 110.95| Target Rs 127| Stop Loss Rs 97| Upside 15%
The stock has witnessed a sharp breakout on heavy volumes pushing the stock above the Rs 100 mark which is bullish in nature.
Shipping Corporation of India: Buy at Rs 130| LTP Rs 133.90| Target Rs 148| Stop Loss Rs 121| Upside 14%
The trend for the stock remains positive. It is trading above key moving averages. Volumes too have witnessed a gradual increase over the past couple of trading sessions which suggests a strong upside.
Tata Coffee: Buy at Rs 215-218| LTP Rs 221| Target Rs 243| Stop Loss Rs 203| Upside 10%
The stock continues to display positive momentum on the back of large volumes witnessed a few days back. The stock is trading above Rs 225 levels and has the potential to rally towards Rs 240-245 levels.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)