Nifty outlook and trading ideas by Sameet Chavan of Angel Broking



Markets clearly shrugged off mixed global cues early last week but did not add significant gains. Throughout the first half of the week, our markets traded positively to once again challenge the all-time high. However on the weekly expiry day, markets had a rough day which was mainly on the back of the negative development across the globe. Fortunately, the fall got arrested in the vicinity of the support zone to eventually conclude the week tad below 15,700.


In the last one month or so, we have seen multiple attempts to reach the millstone of 16,000 but markets are clearly struggling as something or other appears from nowhere to dampen the sentiments. The way we closed on Wednesday (July 7), we were all set to see the magical figure; but global sell off became the spoilsport on this occasion. Fortunately there was no follow through to this selling momentum as we saw Nifty stabilizing after entering the key support zone of 15,650 – 15,600. Honestly when market fails to surpass a specific level after the multiple attempts, it is considered as an ominous sign.




But fortunately there has not been any brutal correction seen so far, which bodes well for the bulls. After last Thursday and Friday’s price action, our confidence of predicting Nifty towards 16,000 or beyond in the ongoing leg has certainly shaken a bit; but we would still remain hopeful as long as Nifty holds a strong support zone of 15,600 – 15,450. If these levels are violated then one should get prepared for a decent short term correction in the market. Until then, better to trade with a positive bias.


During the first half of this week, 15,750 – 15,800 are the levels to watch out for and the first of sign of strength would come only after reclaiming 15,800 on a closing basis. We reiterate that, if this has to happen, the banking continues to be the key factor as it’s trading around its crucial support area. Traders are advised to remain light and stick to stock centric approach by following strict stop losses. Also, it’s important to keep a close eye on the global developments as well which is likely to set the tone for the forthcoming week.

Stock picks:


NSE Scrip Code – TATA METALIKS


View – Bullish


Last Close – Rs. 1194.65


The entire ‘TATA Group’ has done exceedingly well over the past fifteen months and TATA METALIKS despite being a small cap constituent, has not disappointed at all. It has already given four-fold returns in this period and still it’s not done yet. Recently, the stock prices slipped into a consolidation mode after registering a new high in the early part of May. On Friday, we witnessed a good positive traction throughout the session, which resulted in a convincing breakout from the consolidation range. Since the price action is accompanied by the sizable volumes, we recommend buying for a short term target of Rs.1308. The stop loss can be placed at Rs.1127.


NSE Scrip Code – SUTLEJ TEXTILES


View – Bullish


Last Close – Rs. 63.25


Most of the textile counters have been steady movers in last few months. This sub-100 ticket size counter has marched northwards with series of higher highs and higher lows in its entire journey. In fact, if we look at the daily time frame chart, we can observe a typical price pattern where the stock prices suddenly takes a leap and then consolidates for some time. Again the breakout happens from the range and similar sort of price action is repeated. On Friday, we witnessed a fresh breakout from the congestion phase and considering its recent pattern, we recommend buying on a decline for a short term price target of Rs.70. The stop loss needs to be maintained at Rs.58.40.

=============================

Disclaimer: Sameet Chavan is Chief Analyst – Technical & Derivatives at Angel Broking. The analyst doesn’t have positions in any of the stocks. Views are personal.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Related Posts

Bitcoin price hovers around $38,600 in early Tuesday trading

Check out what's clicking on FoxBusiness.com. Bitcoin and Ethereum are both lower early Tuesday morning. Bitcoin was trading at $38,602

US stocks trading mixed despite solid earnings season

Check out what's clicking on FoxBusiness.com. U.S. equity futures were trading mixed ahead of Wednesday's opening bell on Wall Street.

3 Signs a Growth Stock Is Better Than Robinhood

Robinhood Markets (NASDAQ:HOOD) completed its initial public offering on July 29, and it got off to a rocky start. The

What Is Swing Trading? Definition, Strategies and Example

Swing trading is a speculative strategy where investors buy and hold assets to profit from expected price moves. Swing traders