Trading ideas: Two stock recommendations for next week

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The bulls managed to break their two weeks consolidation streak and helped the benchmarks to reach new highs. The NSE Nifty index broke out of its range and sneaked above 15,900 to end the week with a gain of around 1.49%. We have been of the opinion that unless the index breaks the intermediate supports of 15,600-15,450 there is a high possibility of new highs.

At present, the 50-share index is very much near to the psychological milestone of 16,000. If at all this hurdle is taken out with ease in the coming week then we could experience an extended rally towards 16,400 which is an offloading target of us.

Traders should turn extremely cautious because VIX is trading near a multi-year support zone of 12-10.

Sooner or later there could be a spike in volatility. On the front of the level, 15,600 would remain a trend deciding support for the coming week. A breach of the same would apply sudden breaks to the upside momentum.

With respect to the Nifty Bank index, once again it disappointed after giving a breakout on the daily chart and that too was above the strong hurdle of 35,800. Despite a daily close above 35,800, the follow-up move was missing from the financials. Thus we have a view of wait and watch for this space. There are chances that the momentum may pick up above the 36,000-mark.

On the downside, the support has been shifted to 35,000 from 33,900. A breach of the same might result in strong selling pressure in the banking space which could drag the index towards 33,000-32,000 in coming weeks.

Stock Recommendations: Just Dial | Buy | Stop loss: Rs 1,025 | Target price: Rs 1,170 The stock might grab the street’s attention due to its deal with Reliance Industries. On charts it looks strong and poised for an upside of 5%-7% in the coming week.

Reliance Industries | Buy | Stop loss: Rs 2,050 | Target price: Rs 2,220 The stock would be in limelight due to the upcoming results. Technically, it is turning from the support of 89-Day Exponential Moving Average and has a small range breakout in an hourly time frame.

(The writer is AVP: Technical Research at Anand Rathi Shares and Stock Brokers)