Traders are advised to buy short-term stocks in select medium-sized stocks. Traders should focus on Pharma, FMCG, Auto and Hotels stocks.
HDFC Securities of Nandish Shah
After the rise of November 12, the Nifty saw profit recovery at higher levels on Monday. Nifty showed a break of more than 100 points from intraday high in yesterday's trade and it closed near Friday's closing.
However, the primary trends for Nifty remain positive as Nifty is trading above its 5, 20 and 50 day EMA.
It has given a break out of the downward sloping trendline which is located near the highs of 19 October and 9 November.
During the recent downtrend, Nifty found support near the 10-week EMA and from here it showed a bounce back.
Since May 2021, Nifty has not closed below the 10-week EMA which is currently located at 17,780.
Taking a look at the options segment, we saw put writing at the levels of 17,800-18,000. There are indications that the level of 17,800 can act as an important support for Nifty going forward.
We believe that although there is some downside in Nifty but as long as it stays above the support of 17,780, there is an intermediate uptrend on it.
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We also believe that Nifty may rise further. But if Nifty goes below 17,780, then the trend can be seen changing in it.
Keeping this in mind, traders are advised to remain bullish, buy slowly with a stop loss of 17,780 for any downside. On the upside, support is visible for Nifty at 18,342 and 18,600.
After a sharp decline in the second half of October, Nifty Mid and Smallcap indices are seen trading in a small range for a few days.
On November 15, the number of falling stocks in the mid and small segment has been more than the rising stocks, besides the number of stocks setting new highs of 52 week highs has also declined for the last few days.
This means that only a select few stocks in the mid and smallcap segments are being bought. Keeping this in mind, traders are advised to buy short-term short-term stocks.
Traders should focus on Pharma, FMCG, Auto and Hotels stocks. To conclude, short term trade remains positive for Nifty.
The next target for Nifty can be 18,350 and then 18600. Put a stop loss of 17780 for long position in Nifty. Here we are giving you 3 such calls in which you can earn huge in 2-3 weeks.
Lemon Tree Hotels : Buy | LTP: Rs 56.9 | Buying advice in this stock with a stop loss of Rs 54 for a target of Rs 63. This stock can give 11 per cent returns in 2-3 weeks.
Minda Corporation : Buy | LTP: Rs 176.85 | Buying advice in this stock is a target of Rs 200 with a stop loss of Rs 165. This stock can give 13% return in 2-3 weeks.
Tata Consumer Products : Buy | LTP: Rs 852.55 | Buying advice in this stock is a target of Rs 920 with a stop loss of Rs 815. This stock can give 8% return in 2-3 weeks.