Shitij Gandhi
The Indian market began the week on a positive note with Nifty scaling 9,350 and Bank Nifty crossing 20,500-mark on April 28, 2020.
Banking and financial stocks were in focus on April 28 as sharp rally was seen in Bajaj Finance, Axis Bank and IndusInd Bank which majorly supported the rally in the banking index.
On the derivatives front, we are observing a continuous addition of open interest at 9,300 and 9,200 put strike which should act as immediate support for the Nifty.
However, on the higher side, 9,500 call strike still holds the maximum open interest of nearly 26 lakh shares which could be key resistance for the market from the expiry point of view.
On the technical front, Nifty has been consolidating in a broader range of 8,900 to 9,500 from the last few sessions and is still holding back below its major moving averages on daily charts.
We believe that the market is likely to consolidate in the range of 9,200-9,500 in the coming few sessions with traders being more focussed on stock selection on the back of earnings announcements.
The next decisive move can be expected in Nifty once the index moves out of the range of 9,000-9,500.
Here are three stock recommendations for the next 3-4 weeks:
Ajanta Pharma | Buy | LTP: Rs 1,494 | Target price: Rs: 1,815 | Stop loss: Rs: 1,300 | Upside: 21%
After falling back below Rs 1,000 levels last month, the stock saw a V-shape recovery on the daily charts and once again reclaimed Rs 1,400 level in a short span of time.
At the current juncture, the stock has formed an inverted head and shoulder pattern on the daily charts and also given breakout above the neckline of the pattern formation.
The additional volume with the rising price is pointing towards new upswing into the stock in the coming sessions, so traders can accumulate the stock in the range of Rs 1,485-1,495.
The stock saw a V-shape recovery from the lows of Rs 2,100 and has managed to recoup all the losses it witnessed last month, with prices once again holding back above its short and long term moving averages on daily and weekly intervals.
At the current juncture, the stock can be seen trading in a rising channel with expanding volumes as well which suggests fresh long build-up into the prices.
The major support for the stock is placed at its 200-days exponential moving average on the daily charts which is placed around Rs 2,950 levels.
Traders can accumulate the stock in the range of Rs 3,175-3,195.
After taking support at its 200-days exponential moving average on the daily interval, the stock has been consistently trading in a rising channel and maintaining its uptrend with the formation of the higher high and higher bottom pattern.
At the current juncture, the stock has formed an inverted head and shoulder pattern on the daily interval and given the breakout above the same.
Traders can accumulate the stock on dips in the range of Rs 1,560-1,580.
(The author is Senior Technical Analyst at SMC Global Securities)
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