“On the weekly chart, the stock was supported in an uptrend before the recent rally. On the daily chart, the stock has given a consolidation breakout. This indicates an increase in optimism around the stock. In the short term, the stock may rise. Rupak De, Senior Technical Analyst at LKP Securities said. That, there is support at Rs 4,100 at the low end.
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Edited excerpts from a chat on budget expectations and trading ideas for the week:
What is the best strategy to trade the market in the pre-budget week?
In the pre-Budget week, volatility may increase due to different expectations across sectors. Stocks in budget-sensitive sectors may gain interest. However, if the budget fails to meet expectations, those particular stocks may experience significant corrections. Therefore, it is important to avoid leveraged trading and use strict stop losses.
Friday’s session was all about IT stocks. Does the new rally look sustainable in the new week and can it also raise short-term targets for Nifty traders?
IT is suddenly back in the game after TCS’s quarterly earnings boosted sentiment in the sector. A consolidation breakout is seen on the daily chart of the Nifty IT index, indicating a surge in optimism. In the monthly timeframe, it has formed a cup and handle pattern breakout. In the short to medium term, sentiment could remain strong, with the index likely to have significant upside gains, which could ultimately lift the Nifty along with it.
Following Friday’s sharp rally, would you go long on TCS or do you think the stock is now at overbought levels?
On the weekly chart, the stock found support in an uptrend before the recent rally. On the daily chart, the stock has given a consolidation breakout. This indicates a rise in optimism around the stock. In a short period of time the share is Rs. 4,400 may be advanced. At the lower end, support is placed at Rs 4,100.
Nifty Bank ended the week with a loss of 1%. What are the goals now?
On the last day of the week, Bank Nifty remained volatile throughout the day before closing flat. Sentiment may continue to favor the bulls, as the index appears to have found support at the 21 EMA on the daily timeframe on Thursday. A buy-on-dips strategy looks best from the current perspective until it falls below 21,700. At the higher end, resistance is seen at 52,800; Above 52,800, the index may continue its upward journey towards 54,000.
News related to earnings as well as budget expectations will lead to stock-specific movements. What do you want to bet on during the week?
Stocks in the infra, power, railway, housing, defense and fertilizer space are likely to remain in the buzz ahead of the Budget. Focusing on stocks may be a good idea.
Are there any stocks under your radar that look overbought and why?
In a market that has recently experienced a significant rally, many stocks may be trading in the overbought zone. However, just being in the overbought zone may not be a good reason to exit the stock as long as it remains in momentum.
RVNL was the star of the week. Tell us what momentum traders should do now?
Certainly, RVNL was the star of the week after a fantastic surge. Even after this astonishing rally, the stock has not lost its momentum. In fact, the stock has been seen consolidating, which is very common when a stock is gearing up for a long-term bullish trend.
Give us your best ideas for the week.
Buy Indian Bank 559 TGT 600 SL 542
After a consolidation breakout on the daily timeframe, the stock looks promising for the short term. The price is holding above the critical moving average. RSI is in a bullish crossover and rising. On the higher end, the stock may move towards 600, while support is placed at 542.
Buy BSOFT 731 TGT 800 SL 700
The stock has given a downward consolidation breakout on the daily chart. The trend remains positive as it is holding above the critical moving average. The daily RSI is in a bullish crossover. On the higher end, the stock may move towards 800, while support is placed at 700.
Buy IRFC 216.50 TGT 230 SL 208
The stock has finally moved higher after a consolidation breakout on the daily chart. The trend remains positive as it is holding above the critical moving average. The daily RSI is in a bullish crossover. On the higher end, the stock may move towards 230; While the base is placed at 208.
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