Earnings season starts; here's what traders should do now to make money on D-Street

In the week gone by, we witnessed volatile moves within a range for the key indices and the move was completely driven by global cues. While the 17,600 acted as strong support for the Nifty on the higher side 17,900-17,950 continued to act as a sturdy wall. Nifty eventually ended at the highest closing with minor gains of 0.57% against the previous week just below the 17,900 levels.

We did see a spike in volatility and we continue to see resistance around the 17,950-18,000 mark hence traders are advised to avoid aggressive bets and keep booking timely profits. On the flip side, 20-EMA has been acting as strong support for the last four months and this key average at 17,600 continues to remain a sacrosanct point.

For the Bank Nifty, 38,000-38,300 zone remained as a supply zone and even though the key RBI policy was announced on Friday we didn’t see major traction in the index. Going ahead as long we don’t see a clear sustained breakout above the same, the bank index may continue to move within the slender range of 37,300-38,300. With the result season kicks in, traders are advised to focus on individual counters as they are likely to give outperforming opportunities.

Stock recommendations:

BSE | Buy | Stop loss: Rs 1,234 | Target price: Rs 1,545
The stock prices have seen a splendid move from the April 2021 swing low of Rs 543 to Rs 1386 and the move is almost like a vertical cliff. With this strong move, the oscillators were in a deep overbought zone thus resulting in a time as well as price-wise correction. Such corrections are always healthier for a strong bull run and after forming a base at 38.2% retracement of the above-mentioned rally; the bulls have again picked up momentum. On the daily chart, if we observe we can see a range breakout from the last two months consolidation and the formation is similar to a strong bullish pattern known as ‘Inv Head N Shoulder’. The volume activity has again started picking up and the RSI oscillator after forming a base at 40 levels have re-entered the positive zone pointing northward supporting the buy call. With all the above technical observations we have a positive view on the stock and traders can buy at current levels for a short term target of Rs 1,545. The stop loss needs to be placed at Rs 1,234.

Polycab India | Buy | Stop loss: Rs 2,390 | Target price: Rs 2,860
The bulls have a strong grip on this counter as any dip is easily getting bought into. The stock prices witnessed a strong move during the first half of the September month that was accompanied by mammoth volume bars. After a small correction, prices have again confirmed a higher bottom on the 20-EMA and have again resumed up move with a strong bullish candle and huge spurt in volume. Multiple time frame analysis with Monthly and Weekly RSI above 70 and Daily RSI turning northward from the 50 zone suggests a recent dip as again a strong buying opportunity. Placement of +DI above -DI and ADX line above 40 indicates that uptrend is very strong. Hence, we recommend a buy in the counters at current levels for a near term target of Rs 2,860. The stop loss can be placed at Rs 2390.

(The writer is technical analyst at Angel One. Views expressed are personal)