Indian market broke above its crucial resistance levels, thanks to positive global cues which helped S&P BSE Sensex reclaim 41,000, and put the Nifty50 back above 12,000-12,050 levels.
The Nifty50 rallied 1.38 percent while the S&P BSE Sensex recorded a rally of 1.39 percent for the week ended December 13. S&P BSE Midcap index rose 1.1 percent, while the S&P BSE Smallcap index ended the week marginally lower down 0.05 percent.
Positive global cues helped benchmark indices reclaim crucial resistance levels. The S&P BSE Sensex is just 0.38 percent away from its record high, while the Nifty50 is about 0.6 percent away from hitting an all-time high.
Prospects of a trade deal between the United States and China and hopes of a swift Brexit after thumping election win by Britain’s Conservative Party spurred risk appetite, said a Reuters report.
In terms of technicals, the Nifty50 formed a bullish candle on the weekly charts after registering a bearish candle in the previous week. The index closed above its crucial short term moving average such as 5, 13 and 20-Days Exponential Moving Average (EMA) which is a positive sign for the bulls.
Experts feel that the momentum is here to stay as long as the Nifty holds above 11,850-11950 levels. If the Nifty50 breaks above the record high level of 12,158 in the week, then the next resistance level to watch out would be 12,200-12,300.
“It also formed a strong Bullish candle on the weekly scale with a highest-ever weekly close near to 12,100 marks. The index is just 72 points away from its lifetime high of 12,158 and a small follow up could lead the fresh leg of the rally to cherish the bullish momentum,” Chandan Taparia, Vice President, Analyst-Derivatives at Motilal Oswal Financial Services told Moneycontrol.
“Now it has to continue to hold above 12,035 zones to extend its momentum towards 12,250-12,300 zones while on the downside support exists at 12,000 then 11,950 levels,” he said.
India VIX fell down by 2.49 percent from 13.64 to 13.30 levels on week on week basis which is a positive sign. In terms of options data, maximum Put OI is seen at 12,000 followed by 11,500 strikes, while maximum Call OI is seen at 12,000 followed by 12,200 strikes.
The Nifty has managed to form a support base in the range of 11,850-11,800 twice in the recent past (i.e. in mid-November and in the last week) and hence, this range now becomes sacrosanct for the near-term.
“As broader markets also participated in the rally in the last couple of sessions, it is clear that the market has resumed its uptrend. Hence, we maintain our optimistic stance and advise traders to trade with a positive bias,” Sameet Chavan, Chief Analyst-Technical & Derivatives, Angel Broking told Moneycontrol.
“As per the reciprocal retracement theory, the probable target for Nifty in the near-term is seen around 12,250-12,300, whereas the immediate supports are placed around 11,950 and 11,850,” he said.
During the week, metals, auto, and banking were the outperforming sectors that had seen up move with a good rise in volumes.
Here is a list of top 5 stocks which, according to experts, can breakout in the short term:
Expert: Nagaraj Shetti, Technical analyst, HDFC Securities (Timeframe 3-4 weeks) NMDC: Buy | LTP: Rs 114.25 | Target: Rs 127 | Stop Loss: Rs 103 | Upside: 11 percent
Daily and weekly timeframe charts indicate a sustained upside in NMDC for the last couple of weeks. The stock price as per the weekly timeframe is now placed on the verge of an upside breakout from the key overhead resistance of around Rs 115-117.
This area has been a multi-month hurdle for the stock price over the last many months. The volume and oscillators are showing a positive outlook ahead.
Buying can be initiated in NMDC Ltd at CMP (Rs 114.25), add more on dips down to Rs 108, for the upside target of Rs 127 in the next 3-5 weeks. Place a stop loss of Rs 103.
Hindalco Industries: Buy | LTP: Rs 208.25 | Target: 232 | Stop Loss: Rs 191| Upside: 11 percent
This Metal stock has been moving in a larger consolidation pattern over the last few months. During this period the stock price has faced a key overhead resistance around Rs 206-207 levels and failed to sustain above it.
Recently, it moved above the resistance and showed an attempt to break out on the upside from this key hurdle. A sustained move above Rs 209-210 could open up renewed buying enthusiasm in the near term.
One may look to buy Hindalco at CMP at Rs 208.25, and add more on dips towards Rs 199, for the upside target of Rs 232 in the next 3-5 weeks. Place a stop loss of Rs 191.
Expert: Gaurav Garg, Head of Research, CapitalVia Global Research Limited
(Timeframe 3-4 Months)
Tata Motors: Buy | LTP: Rs 176 | Target: Rs 225 | Upside potential: 27 percent
The stock was in a month-long consolidation in the range of 180-160. It is on the verge of a major pattern breakout and we believe a break above 180 the stock has the potential to move till 225.
Other oscillators too are in the favor of an impending breakout for the stock. Traders can buy it for the target of 225.
Yes Bank: Buy | LTP: Rs 46.65 | Target: Rs 150 | Upside potential: 226 percent
The stock has been in news for a while for its cash crunch and fund-raising efforts. Big bulls from India and abroad have shown their trust in the brand values of Yes Bank.
Historically, as well as currently, it has taken support at psychological levels of 30 and 45 and bounced back from there. Given these parameters, one can accumulate this stock with a target of 150.
Apollo Tyre: Buy | LTP: Rs 166 | Target: Rs 250 | Upside potential: 50 percent
After many years of consolidation, the stock has taken support again within the range of 130-150.
Being a manufacturing industry, it also enjoys the recent tax cut announcements by the government. One can buy it with the target expectations of Rs 250.