Markets had a buoyant start for the new trading week on October 31 and previous week's struggle around 17,800 finally came to an end as we managed to open convincingly above it. After the initial upticks, index slipped into a consolidation and kept flirting with the psychological 18,000 mark. Buying re-emerged towards the fag end of the week in some of the heavyweights, which helped the Nifty finally surpass this key figure with some authority.
This was followed by yet another gap-up on the subsequent day and then the Nifty went on to surpass the September high of 18,115. During the remaining part of the week, the markets looked lethargic with no intent to move beyond the 18,200 mark. However, the bulls had enough strength to defend 18,000 convincingly to eventually conclude the week by pocketing nearly a couple of percent on a weekly basis.
The market posted a weekly close above 18,100 last Friday. This is a clear indication how strong our markets have been of late. Undoubtedly, the bulls continue with their hegemony in the domestic markets and are eying record highs now.
If there is no aberration globally, we are good to go towards 18,250 – 18,350 first and then a march towards previous highs 18,600 looks very much on cards in the ongoing calendar year.
As far as supports are concerned, 18,000, followed by 17,900 should be treated as sacrosanct zone and any intra-week decline would provide opportunities to create fresh longs.
Traders are advised to continue with an optimistic approach and now, with other sectors chipping in, we expect a good broad-based buying in the forthcoming week.
Banking was slightly muted in the latter half of the last week; but never mind, it is just a breather around previous highs after such a spectacular rally in the recent time. Soon, we would expect banking to resume its upward trend.
Here are two buy calls for next 2-3 weeks:
New India Assurance Company: Buy | LTP: Rs 94.75 | Stop-Loss: Rs 88.60 | Target: Rs 106 | Return: 12 percent
This stock has been off radar for quite a while now. On Friday, we witnessed a massive spurt in volumes which was way higher than average daily volumes. In this process, stock prices soared nearly 7 percent on last Friday.
The recent traction construes a strong setup for the counter and price wise, a ‘symmetrical triangle’ pattern breakout has been observed.
In addition, the technical parameters have turned highly bullish. The stock is well-versed to carry momentum in a comparable period.
We recommend buying for a near term target of Rs 106. Traders can participate by following strict stop-loss at Rs 88.60.
SAIL: Buy | LTP: Rs 84.10 | Stop-Loss: Rs 81 | Target: Rs 90 | Return: 7 percent
The entire metal space was on a roll on last Friday and throughout the session, we witnessed these counters displaying a strong traction. With Metal index trading at 7-month high, we expect the momentum to continue in metal counters.
We like ‘SAIL’ from this pack considering its strong price volume breakout on the daily time frame chart. If we look at the oscillators reading, the prices are well poised to move in northward direction.
Traders are advised to buy for a positional target of Rs 90. The strict stop-loss needs to be placed at Rs 81.
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