Nifty to face resistance at 17500 and 18000 levels; TCS, Bharti Airtel among stocks to buy this week

Considering the overall chart structure, we are expecting the index to trade in a volatile manner within a broader range. On the higher side we can expect resistance at 17500 zones and then 18000.

Nifty, Nifty 50
On a down side, support is placed at 16800 and 16500 zones. (Image: REUTERS)

By Rahul Shah

After a long time, volatility is in the front seat accompanied by India VIX at 18 plus. Sentiments were battered across global equity markets with the detection of a new covid-19 variant. In spite of this sell-off, India still remains the top performer in the current calendar year with Nifty up 21% v/s the flattish performance of the MSCI EM index. RSI oscillators on the daily and weekly charts are witnessing loss of momentum but at the same time slope of the indicator is not signalling immediate steep declines in the market.

Considering the overall chart structure, we are expecting the index to trade in a volatile manner within a broader range. On the higher side we can expect resistance at 17500 zones and then 18000. On the downside, support is placed at 16800 and 16500 zones. On the other hand, fundamental and macro picture looks promising, the economy is witnessing a sustained pick-up, high-frequency indicators crossing pre covid levels. Both GDP numbers as well as the GST collection were robust and indicated a clear growth path in future. We expect sector rotation in the market to continue and defensives like IT, TELECOM, and consumers make come back till sentiments improve. Equity valuation after the sell of are relatively more reasonable now. In the coming week, we believe markets will be more of stock-specific Happy Trading!!!

Pick of the week :

TCS – Buy

Stop-loss: Rs 3580 | Target: Rs 3800

TCS has formed a strong base near the 200 EMA and has given a consolidation breakout on the daily charts around 3570 It is forming a bullish candle on weekly scale and has managed to cross a 5 week consolidation which indicates strong buying interest  RSI oscillator is moving northward on weekly scale and thus showing further strength in the counter Considering current chart structure, we advise traders to buy the stock for an up move towards 3800 with stop-loss of 3580.

Bharti Airtel – Buy

Stoploss: Rs 695 | Target: Rs 770

Bharti Airtel has been making higher top – higher bottom pattern on the weekly scale indicating that the trend is up It is trading near its lifetime high territory and inching higher with strong momentum on the weekly and monthly charts RSI oscillator is positively placed which will support the move towards the higher levels Looking at overall price structure, we are expecting the stock to inch higher towards 770 zones Hence, we advise traders to buy the stock with a stop-loss of 695

Grasim – Buy

Stop loss: Rs 1660 | Target: Rs 1825

On the daily charts, after the upward movement’s, the stock in sync with market correction has corrected from its all-time high of 1893 and made a low of 1650, it has pulled back just from its support of 1650 and bounced back smartly to 1702, moreover the incremental volume activity at support area is indicating reversal from the current levels. Buy with a target of 1825 with sl of 1660.

(Rahul Shah is a Senior Vice President, Group Advisory Leader-PCG, Broking & Distribution at Motilal Oswal Financial Services. Views expressed are the author’s own. Please consult your financial advisor before investing.)

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