What are your expectations from the market going into the new week. What are you seeing on the charts, considering we ended a little bit weaker than we expected on Friday?
Yes, the markets were off to a good start on Friday and there was a lot of anticipation that probably the Nifty would scale past initially above 17,900 and then probably even come closer to that 18K mark as well.
But somehow I believe even though the markets tapered off from their opening highs, it was not a bad week to try and take out some profits or chips off the table after what the markets had witnessed in the previous week where there was lot of trepidations and fear that the markets would show signs of some sort of a top out formation.
I think this week has been spectacularly positive for the index right from the word go. Some of the real estate stocks and many of the other underperforming stocks like IndoStar, Vodafone-Idea, etc have made a phenomenal comeback. Adding to that the already performing stocks and sectors like the Nifty IT index have done fabulously well.
So currently the market is not in a specific sector or a specific stock kind of a mode as there are a lot of sectors and a lot of stocks which are participating.
I think in the last two to three months the markets have kept on moving up higher and higher. So till the time we do not see evidence that the markets are reversing, we can assume that the uptrend would continue for the indices.
What are your top stock picks for the new week?
So I am expecting that the markets will continue to remain buoyant. I would expect many of these underperforming stocks and sectors to make a very strong comeback for themselves.
So I would like to recommend three stocks. The first one which I would recommend would be a buy on M&M. In the last couple of weeks we have been discussing how the auto stocks are due for a big revival and many indicators have already started to show signs of a breakout for the auto index.
So M&M is what I would pick up as the first stock from that pack. The stock is heading towards a bollinger band breakout, a breakout of consolidation as well as the swing breakout on the daily charts. So I would suggest a buy with Rs 850 as a target and the stop loss could be kept at Rs 725.
The second would be a buy on Vodafone Idea. In the last two to three weeks I have given numerous buy calls on Vodafone-Idea because of the fact that the stock has shown a completely different characteristic of change of open interest. We have seen a completely different kind of price trend as well for Vodafone-Idea. The three days when the markets had corrected, the stock had remained very sideways and when the markets regained momentum, the stock managed to break out yet again of the previous swing highs. So this is a different kind of a characteristic and trend for Vodafone-Idea and I would expect that the stock would continue to move up higher. So I would place a target of almost Rs 15 for Vodafone-Idea and would suggest a buy with stop loss to be kept at Rs 8.5.
The third would be a buy on Kajaria Ceramics. The stock managed to confirm a breakout on Friday’s trading session and has given a breakout for bullish flag pattern. So Kajaria Ceramics is what I recommend as a buy at a target of Rs 1300 and the stop loss can be kept at Rs 1200.
