Sameet Chavan
What a spectacular past week it was for our markets, especially after seeing a massive knock of more than 300 points on the Budget Day. The kind of fall we have witnessed post the Budget who would have thought of such kind of price movement in the subsequent week.
But fortunately, the fear over ‘Coronavirus’ subsided as the week progressed and this eventually had a positive impact on all global markets to a great extent.
We, too, managed to stabilise from the shocker Budget day and witnessed a v-shaped recovery in tandem with global peers. With this, Nifty recouped almost all losses to end the remarkable week with nearly 4 percent gains.
Now, it’s easy analysing in hindsight and cheering stupendous recovery but the conviction and emotions were completely shaken last Saturday after witnessing such a terrible fall.
In the midst of all this, we remained a bit hopeful considering the cluster of support around 11600. The ‘200-SMA’ coupled with few Fibonacci ratios acted like a sheet anchor for our markets and played an essential role in the swift recovery.
Eventually, the hope turned into a reality. We are back above 12000 now, considerably in the safer terrain and the way prices are shaped up now, we expect the northward trajectory to continue.
Technically, we have reclaimed the ’20-day EMA’ which is now accompanied by the classical positive crossover in ‘RSI-Smoothened’ oscillator. Hence, one should continue with a ‘Buy on decline’ strategy.
The immediate supports are now placed at 12050 – 11980 and on the higher side, we saw some breather around 12150; but it’s a matter of time, the index would surpass this minor hurdle to march towards 12250 and beyond.
Last Saturday, although, ‘200-day SMA’ we were seeing as a possible saviour, but our real conviction was based only on the overall positioning of the ‘Nifty Midcap 50’ index. It certainly has not disappointed us and from here on, we expect the outperformance to continue from the broader market.
Here are two stocks that can give 9-12% returns in the next 3-4 weeks:
Nippon Life India: Buy| LTP: Rs 379| Target: Rs 415| Stop Loss: Rs 358| Upside 9.5%
Despite the market undergoing a lot of turbulence in the first half of the calendar year 2019, this stock maintained its positive posture and has outperformed significantly.
Recently, we witnessed some pause to this Bull Run; but on Friday, the stock prices have finally broken out from the recent congestion zone and thereby confirm a resumption of higher degree uptrend.
If we look at the volume activity, it has risen substantially; providing credence to the up move. Thus, we recommend buying this stock for a target of Rs.415 over the next days. The stop loss should be fixed at Rs.358.
VIP Industries: Buy| LTP: Rs 496| Target: Rs 555| Stop Loss: Rs 461| Upside 12%
The entire broader market has been vibrant since the last couple of months and a lot of marquee mid-small size names have done extremely well.
This once one of the multi-baggers underwent a massive price as well as time correction in the last 12 – 15 months, is now showing some signs of revival.
Last week’s price action was encouraging and in the process, the stock has managed to confirm a breakout from recent hurdles. Importantly, this up move is backed by decent volumes.
Looking at the favorable risk-reward ratio, traders are advised going long for a target of Rs.555 over the next few days. The stop loss should be fixed at Rs.461.
(The author is Chief Analyst-technical & derivatives, Angel Broking)
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