The Friday’s session remained thoroughly range and the domestic equity markets ended with nominal losses. However, on week-on-week basis, benchmark index NSE Nifty ended with minor gains. Despite this, on the weekly charts, the Nifty predominantly displays 8,800-8,850 range as a major resistance levels and therefore, despite intermittent pullbacks that we may see, the overall bias will continue to remain negative. The lead indicators have displayed signs of weariness as well. For the coming week, the levels of 8,790 and 8,850 will act as stiff resistance levels for the markets. The supports will come in at 8,550 level. Overall, adopting a highly cautious approach, it is advised to utilise intermittent up move that we might see to protect profits at higher levels. Volatility will remain and sector rotation will be necessary and scouting for individual stock specific performance will remain evident.
Ashok Leyland (BUY)
Why Buy: After forming a high of 111.70, Ashok Leyland shares had formed a falling channel and had been in a decline since last couple of months. After forming a intraday low of 75.05 few days back, it has formed a potential bottom and is now attempting to reverse its trend. The Daily MACD has reported a positive cross over RSI shows bullish inclinations. With a very strict Stop Loss of 74, the stock may be bought at or above 81 with target of 86 and 91.
Reliance Industries (BUY)
Why Buy: The stock formed a high of 1129.55 after remaining sideways for a major part of 2016. The stock is showing short term upward momentum with a DMA showing a positive crossover. The Daily MACD to reports a positive crossover with other lead indicators showing resilience to any retracements. While maintaining a strict stop loss at 1080, the stock may be bought at or above 1115 with short term target of 1155.
Why Buy: The stock has been in a consistent decline since couple of months from 2115 levels. After attempting to find a bottom at 1395, the stock may show a trend reversal in coming days. The RSI has shown bullish inclinations and the Daily MACD has a positive crossover. The stock may see a decent up move if it manages to move past 1515 levels. Lupin may be bought at or above 1515 with short term target of 1635 while maintaining a strict stop loss of 1450.
(The author is CMT, Consultant Technical Analyst at Gemstone Equity Research & Advisory Services)