Vinay Rajani, HDFC securities
Nifty made an all-time high of 15,915.65 in intraday trading yesterday i.e. June 28. But it did not manage to stay on its upper levels and profit recovery was seen at the upper levels.
Consolidating in the narrow range of 15,700-15,900 since last 5 trading sessions. Nifty has to break out of this range for the bulls to take control of the market. Meanwhile, small-medium stocks are outperforming the giants. The primary trend of the market remains bullish as Nifty remains above its 10, 20, and 50 day moving averages.
Looking at derivatives, the highest call open interest is being seen at 16,500. Whereas the highest put open interest is seen at 15,500. Based on these figures, we can expect the Nifty to achieve the target of 16,500 if it crosses the 15,900 barrier.
A stoploss of 15,500 would be recommended for long positions. If Nifty slips below 15,500 then its trend will turn from Bullish to Bearish. Keeping this in mind, traders should bet in the market by adopting a stock and sector specific approach. Talking about sectors, from here we can see banking, IT and pharma performing well.
Vinay Rajani says that although the bulls’ hold on the market is looking strong, but we should not be careless as more than 94 percent of NSE500 stocks have reached their 200 DMA. If we look at the previous bull market data, then these figures indicate that now a reversal can also be seen in the market from the overbought zone.
Nifty’s Smallcap index has seen a rise of two times from its March 2020 bottom. Now the stocks of this sector need to be selected with great care and adequate risk management. Place trailing stoploss in trading positions.
Vinay Rajani says that once the short term hurdle of 5,900 is crossed, Nifty can touch the level of 16,300. As long as Nifty stays above 15,500, its short term trend will remain bullish.
Today’s Top Picks
Tata Elxsi | LTP: Rs 3,834 | Buying advice is given in Tata Alexi with a stop loss of Rs 3,600 for a target of Rs 4,150. An upside of 8% can be seen in this stock in 2-3 weeks.
CSB Bank | LTP: Rs 358 | This stock has a buy call with a stop loss of Rs 328 for a target of Rs 399. An upside of 11% can be seen in this stock in 2-3 weeks.
CCL Products | LTP: Rs 362.95 | This stock has a buy call with a stop loss of Rs 335 with a target of Rs 405. An upside of 12% can be seen in this stock in 2-3 weeks.
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