Maharashtra Bank, Petronet LNG and Finolex Cables are top 3 ideas from Kunal Shah, senior technical & derivative analyst at LKP Securities for the week ahead.

Edited excerpts from a chat:

After the solid rally seen particularly on Thursday’s expiry, what does the bigger picture look like for the April series which will also mark the beginning of voting in the Lok Sabha election?

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The upcoming April series is expected to be volatile due to the upcoming Lok Sabha election. However, despite this volatility, the underlying sentiment remains bullish as the Nifty has successfully surpassed the hurdle of 22,200. In the near term, the index is targeting levels of 22,800 to 23,000. Once this target is achieved, the index is anticipated to consolidate within the broad range of 22,200 to 23,000.

Steady buying was seen in both mid and smallcaps during the week. Do you see the green patch continuing in favour of bulls as we step into the busy earnings season in April?

In both the small and mid-cap indices, buying was observed from lower levels, suggesting a favorable “buy on dip” strategy. April is expected to be volatile. The immediate support for the index is at 47,200, and as long as it holds above this level, the outlook remains bullish. The immediate resistance stands at 48,300. A breakthrough above this level would pave the way for further gains toward 49,000 to 50,000 for the midcap index.

After the sell-off in Nifty IT, do you see chances of a pullback rally now?

Following the recent correction in the Nifty IT sector triggered by Accenture’s guidance, attention will now turn to earnings scheduled for April. Despite the overall bearish outlook for the IT space, a pullback is anticipated initially towards the 36,000 level. However, the broader picture remains bearish, with the lower-end support positioned at 34,700. A breach below this support level could intensify the downward momentum in the sector.BSE and Angel One were among the top gainers in the week. Which side of the trade would you be going ahead?Amid the booming Indian economy, both the stock market and the broking industry are poised for growth in the near term. BSE, in particular, has been an outperformer recently, with indications suggesting that this trend may persist. However, it’s advisable to adopt a buy on dip strategy, considering the recent substantial rally in the stock.

Give us your top picks for the week.

1) Buy Finolex Cables in the range of Rs 960-940. Stop loss: Rs 880. Target price: Rs 1065/1120

The stock has recently demonstrated a significant technical breakthrough, forming a double bottom pattern on the chart, accompanied by a notable surge in trading volumes. Additionally, it has convincingly surpassed key moving averages (20, 50, 100 EMA) with strong volume support, signaling a robust breach of resistance levels and a potential change in trend direction. Furthermore, the momentum oscillator RSI has sharply rebounded from the oversold territory, indicating a notable shift in momentum towards the bullish side. In terms of support, the stock has a firm base around the 900-880 zone, serving as a cushion for bullish sentiment. As for potential upside targets, they are projected in the range of 1065-1120.

2) Buy Petronet LNG in the range of Rs 266-262. Stop loss: Rs 250. Target price: Rs 285/300

The stock has recently exhibited a bullish reversal pattern, forming a double bottom formation on the daily chart along with a morning star pattern, indicating a robust reversal signal. Additionally, the momentum indicator RSI has confirmed the bullish sentiment by providing a positive crossover and is poised for a breakout from a falling trendline, which could further accelerate the bullish momentum. In terms of support, the stock has a strong base around the 250 level, serving as a cushion for bullish investors. Looking ahead, potential upside targets are projected in the range of 285 to 300.

3) Buy Maharashtra Bank at Rs 62. Stop loss: Rs 58. Target price: Rs 68/70

The stock has recently experienced a significant breakout, forming a double bottom pattern on the daily chart, accompanied by a notable surge in trading volumes. This breakout is further supported by a positive crossover observed on the daily chart’s momentum indicator, the RSI, indicating a bullish momentum shift. Additionally, the stock has surpassed its 20-day moving average (20DMA) with increased volumes and is now approaching a breakout from a falling trendline. A key support level is identified at 58, expected to provide a cushion for bullish movements. The stock’s potential upside targets are set at 68 and 70.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)


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