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Possibility of profit-booking at 17,780-17,800 on Nifty can't be ruled out

Considering the recent price action, traders are advised not to carry aggressive overnight bets for a while and should adapt the strategy to follow one step at a time and respect levels on either side.

August 15, 2022 / 08:26 AM IST
 
 
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Indian markets started the truncated week ended August 12 on a flat note taking cues from muted global markets, but the momentum accelerated soon, led by a rally in the heavyweights, and the Nifty reclaimed the 17,500 mark. As the week progressed, our markets also extended their rally, which was generally due to improvement in global markets and the positive contribution of FIIs.

However, the follow-up buying interest was missing for the entire week, showcasing the tentativeness among the market participants at the higher levels. Eventually, the benchmark index continued its winning streak for the fourth consecutive week and ended the session a tad below 17,700 by procuring over 1.73 percent to the previous week’s close.

Technically speaking, the winning streak in the index has brought it towards the sloping trendline on the weekly chart, which might be considered as the major hurdle for the index in the near period. Also, the recent upward move has been vertical in nature, so one should not rule out the possibility of profit booking at the critical resistance zone.

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And any sort of correction in the upcoming week should be considered healthy post such a strong rally, as structurally, we may get a higher bottom. The undertone is likely to remain strongly bullish, and any dip towards the consolidation zone of 17,150-17,400 could be seen as an opportunity to add new longs in the index from a directional point of view.

As far as levels are concerned, 17,780-17,800 is the crucial supply zone, and any decisive breach above the same could only trigger the next set of rallies in the index.

Considering the recent price action, traders are advised not to carry aggressive overnight bets for a while and should adapt the strategy to follow one step at a time and respect levels on either side.

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The favourable global scenario was one of the major catalysts for the entire bull run in the week; hence, one should stay abreast with global developments and the key domestic macro data. Also, one can continue to focus on individual stocks as the thematic moves are still playing out well in the market.

Here are two buy calls for next 2-3 weeks:

Aditya Birla Fashion and Retail: Buy | LTP: Rs 289.90 | Stop-Loss: Rs 275.80 | Target: Rs 315 | Return: 9 percent

ABFRL has been in a secular uptrend post the swing low of Rs 221 odd levels and is currently hovering well above all its major exponential moving averages on the daily chart.

The stock has gained traction in terms of volume from the past couple of trading sessions and has recently seen a breakout from the stiff resistance zone of Rs 280.

Also, on the technical front, the primary indicators are in the bullish trajectory, favouring the continuation of the uptrend. Hence, we recommend buying the stock for a trading target of Rs 315. The stop-loss to be placed at Rs 275.80.

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United Breweries: Buy | LTP: Rs 1,644.30 | Stop-Loss: Rs 1,570 | Target: Rs 1,720 | Return: 4.6 percent

UBL has seen a strong reversal from the recent breakout zone and is currently hovering well above all its major exponential moving averages on the daily chart. Meantime, the stock has reversed from the lower band of the Bollinger and is settled above the mean.

Even on the technical front, the 14-period RSI (relative strength index) has been placed in the comfort zone post the positive crossover, which suggests the momentum to continue in the near term. Hence, we recommend buying the stock for a trading target of Rs 1,720. The stop-loss to be placed at Rs 1,570.

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Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Osho Krishan is the Senior Analyst - Technical & Derivative Research at Angel One.
first published: Aug 15, 2022 08:26 am
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