Market view: Sudeep Shah of SBI Securities believes that the benchmark index Nifty may break the support level of 22,800 this week. He further said that all important moving averages and momentum indicators are indicating strong downside momentum, which confirms trend weakness. Talking about stocks, he said that he is predicting a rise in Laurus Labs, Wipro and Zensar Technologies. He said that all the moving average-based setups are indicating strong bullishness for Laurus Labs.
Sudeep, Deputy Vice President and Head of Technical and Derivatives Research, SBI Securities It further said that Zensar Tech has given a horizontal trendline breakout on the daily scale, which is confirmed by strong volumes. While Wipro has also given trendline breakout with strong volumes. He believes that Wipro has formed a large bullish candle on the weekly scale which is a sign of more bullishness to come.
Are you in the mood to buy into Laurus Labs after reading the momentum indicators?
In response Sudeep said that yes, RSI (Relative Strength Index) on the weekly scale has taken support near 60 level and made a strong comeback which is a strong bullish signal as per the RSI range shift rules. Furthermore, all moving average-based setups are pointing towards strong bullish momentum. In such a situation, this stock is likely to continue its upward trend and move towards the level of Rs 650. After this it can go up to Rs 670 in the short term.
Are the charts indicating long term trades in Hindustan Unilever and Britannia?
In response, Sudeep said that both these stocks have formed a solid base near their important support levels. Furthermore, the Momentum Indicator and Oscillator are showing bullish divergence, indicating a potential bullish trend. Therefore, it would be advisable to start buying these stocks in small quantities at the current levels.
Do you see a possibility of Nifty crossing the 23,000 level this week?
Responding to this, Sudeep said that yes, the benchmark index Nifty can test the support level of 22,800 this week. The index has closed on a negative note for the third consecutive week, indicating continued bearish pressure on it. All important moving averages and momentum indicators are indicating strong downside momentum. This confirms weakness in the trend. Moreover, the index is underperforming its global peers. This indicates that the overall trend of the index is weak.
Trading Plan: Will Nifty be able to maintain the level of 23,000, will Bank Nifty be able to stay above 48,000?
Will Bank Nifty be able to maintain the low of January 13 this week?
On this, Sudeep said that for the second consecutive week, the banking benchmark index Bank Nifty has formed a candle with a long upper shadow, which is an indication of selling pressure at the upper levels. Additionally, the Weekly RSI has fallen below 40 points for the first time since June 2022, indicating weak momentum. Sudeep believes that if the index crosses the important level of 47,898 (which is the low of January 13) then it could lead to a sharp correction in Bank Nifty. In such a situation, traders should remain alert around this important support.
Sudeep’s two top picks for this week
Zensar Technology
Zensar Technologies: The stock has given a horizontal trendline breakout on the daily scale. The breakout is confirmed by strong volume. Moreover, it has formed a long bullish candle on weekly basis, which is a sign of further bullishness. Apart from this, Momentum Indicator and Oscillator are also indicating strong bullishness. Therefore, it is advisable to accumulate the stock in the range of Rs 835-825 levels with a stop-loss of Rs 800. On the upside, it may test Rs 890 level. After this, a level of Rs 920 is also possible in the short term.
Wipro: This stock has given trendline breakout along with strong volumes. The stock has formed a long bullish candle on a weekly basis, indicating further upside. Momentum indicators and oscillators are also indicating strong bullishness in the stock. It would be advisable to accumulate in this stock also at Rs 320-318 levels with a stop-loss of Rs 309. On the upside, it may show Rs 335 levels. After this it can go up to Rs 350 in short term.
Would it be advisable to buy into Mphasis?
In response, Sudeep said that although there is no textbook triple bottom pattern visible in this stock, but this stock is indeed worth buying. It has formed a solid base near its 200-day EMA and is moving upwards again. This comeback from the support zone is supported by strong volume. Furthermore, all moving averages and momentum-based indicators are indicating strength. These reinforce the positive outlook for the stock.
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