Recap: Nifty 50 on 20 December
Last week saw extraordinary events that led to significant declines in the broader indices. As market trends began to slip, chaos ensued due to the lack of a clear direction. The market rebounded strongly following a historic global selloff but there are concerns about the sustainability of the rally. With trends remaining uncertain, we now await further clarity from global markets on whether bullish momentum in the Indian markets will continue.
Indian stock markets: The way forward
Last week the markets began on shaky ground, and Thursday’s decline only added to the pessimism. The Nifty briefly surpassed 24,840, raising hopes that the rally would continue, but the bulls faced significant disappointment as prices tumbled. The drop below the gap support around 23,900 suggests there’s potentially trouble ahead. According to this pattern, prices are likely to retreat to the origin of the move.
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If the bearish trend continues, we could see a drop that tests previous lows around 23,400, potentially extending to 23,100. With a shortened trading week, it’s crucial to stay alert to emerging trends in the coming days.
Three stocks to buy, recommended by NeoTrader’s Raja Venkatraman:
• AXISBANK: Sell below ₹1,070, stop ₹1,095, target ₹1,040
As bank stocks lost their footing this counter was seen slipping. As the negative bias shapes its trends, investors have been unable to hold on to their gains. With trends hinting at more downside, you could expect a further decline in the coming days. Look to initiate a short.
• HCLTECH: Buy at ₹1,911, stop ₹1,895, target ₹1,935
The reaction on Friday invited IT counters to pull back into support as trends remain positive. With positive momentum seen in counters across the board, you could look at this stock. The ADX DMI setup hints at positive trends emerging at lower levels with the potential to rise further.
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• KEC: Buy at ₹1,240, stop ₹1,220 target ₹1,265
KEC stock has seen new buying interest after securing strong orders. The daily chart for the past few days indicates that the bullish momentum is set to continue. As the value resistance area around ₹1,225 has been surpassed, you could expect more upside in the coming days.
Raja Venkatraman is co-founder, NeoTrader.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.
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