Trading ideas: Two stock recommendations for next week
From here on, things would get more and more difficult for unidirectional traders since markets could remain choppy.
It was a highly volatile truncated week for the domestic equity markets. The volatility index India VIX surged by 7% during the week to close near the 14 mark. The Nifty index although reached another milestone of 16,700 but failed to sustain at higher levels due to weak global cues. As a result, the markets underwent some profit booking which forced the index to close near the 16,450 mark with a loss of 0.48% from its previous week’s close.
On the weekly scale, we are witnessing a candlestick pattern that resembles a shooting star. Although it is a reversal in nature it needs confirmation. Going ahead, Friday’s low of 16,376 would be a critical level to watch out for. A close below the same would reinforce the bears to drag the index towards 16,200-16,000 levels. If the support is held in the coming sessions then we expect bulls to retaliate back. In such a situation 16,509 would be an immediate resistance and above the same Nifty could retest new highs. From here on things would get more and more difficult for unidirectional traders since markets could remain choppy. Thus, traders are advised to stay light from here on.
With regards to the Nifty Bank index, it cracked by more than 3% during the week. Now at this juncture, it is hovering near the strong rising trend line support placed near the 34,900 mark. Even the low of recent session coincides with that support. Thus going ahead, 34,900 would be decisive support for the index. A breach of the same might further intensify the selling pressure in the Nifty Bank index. On the contrary, only a move above 35,300 would bring some hope of a new high in the coming sessions for the banking index
Stock Recommendations
Cadila Healthcare | Buy | Stop loss: Rs 514 | Target price: Rs 574
The stock is turning from the support of Rs 520 which is the placement of 200 DSMA and also its previous demand zone. The risk-reward ratio looks favourable to go long at this point in time.
Marico | Buy | Stop loss: Rs 514 | Target price: Rs 574
FMCG names like HUL and Britannia confirmed a major breakout in larger degree charts. Even Marico is trying to catch up with its peers. There is still more room on the upside in the coming week. Thus, traders can buy the stock on dips near Rs 534 level.
(The author is AVP-Technical Research at Anand Rathi. Views expressed are personal)