Trade Call: 2 Technical Stock Picks With Buy Rating For Next Week By Axis Securities

The Nifty and Sensex reached further record highs on Friday as indices continued their upward trend. The Nifty surged 274.00 points, or 1.29 per cent to close at 21,456.70, while the Sensex added 969.55 points, or 1.37 per cent to settle at 71,483.75. This week, the bulls on Dalal Street went crazy, sending Nifty and Sensex up more than 2 per cent because positive tidings came from the domestic and international fronts.

Weekly Market Outlook

Vinod Nair, Head of Research at Geojit Financial Services said, "The market surged to new highs, buoyed by positive indicators from both domestic and global fronts. Robust domestic industrial production and manufacturing PMI, coupled with the RBI's positive remarks on India's GDP forecast, contributed to the bullish trend. The ease in US bond yield and the expectation of multiple rate cuts by the FED in 2024 further fuelled market optimism. Investors expressed confidence that clouds over US economic growth would dissipate in H2CY24, anticipating a soft landing facilitated by normalization in monetary policy. The IT sector rallied 7.6% this week in expectation of a rise in demand from the US, optimism about AI-based opportunities, and hope that the Fed will cut interest rates in 2024. We expect a near-term consolidation in the market due to elevated valuations, concerns over El Nino, and a slowdown in world GDP."

Sheersham Gupta, Director and Senior Technical Analyst at Rupeezy, said, "Nifty sustained its upward trajectory, ending green for the 7th consecutive week and setting a new all-time high. Investors should book profits on Monday as the index reaches the crucial 21500 level. Open interest suggests Nifty has strong support at Rs 21400. Anticipating the week ahead, we foresee the markets entering a consolidation phase. The Bank Nifty, spearheaded by PSU Banks, has surged to a record-breaking 48200, inching closer to the significant 50,000 milestone. Technical analysis and open interest data suggest a support range at 47800-48000, with resistance identified at 48200."

Stocks To Buy Next Week

The brokerage firm Axis Securities has suggested two momentum stock picks for the next week. The brokerage has suggested to buy the shares of Poonawalla Fincorp and Life Insurance Corporation of India. Check below the technical analysis which includes the entry price, target price and stop loss.

Poonawalla Fincorp

Buy at Rs 433-425, target: Rs 501-535, trend reversal: Rs 395, timeframe: 3-4 weeks

Poonawalla is currently trending within an upward-sloping channel on the weekly chart, recently finding support at the lower band and appears poised to advance toward the upper band. On a daily chart, the stock experienced a robust rally from the 360 level, followed by a nine-session consolidation; today's trading session witnessed a breakout above the consolidation, suggesting a potential continuation of the uptrend.

It is well-placed above the 20, 50, 100, and 200 days SMAs, key moving averages for the short to medium term. The weekly and daily strength indicator RSI has exhibited a bullish crossover above its reference line, signaling a positive sentiment. The near term target is at Rs. 146 and we may eventually head towards Rs. 155, said the brokerage.

Technical analysis

Consolidation Breakout: A consolidation breakout in stock trading refers to a significant price movement beyond a narrow range (consolidation), signaling a potential shift in trend.

Upward sloping channel: The stock's trajectory within an upward-sloping channel on the chart suggests a sustained bullish trend, indicating potential upward movement.

Moving Averages: Key technical averages, including the 20, 50, 100, and 200 days moving averages, signify the stock's current trend and potential support/resistance levels.

RSI: The relative strength index (RSI) is a momentum indicator used in technical analysis. RSI measures the speed and magnitude of a security's recent price changes to evaluate overvalued or undervalued conditions in the price of that security.

Life Insurance Corporation of India

Buy at Rs 790-774, target: Rs 874-916, trend reversal: Rs 740, time frame: 3-4 weeks

LICI exhibited a breakout above the neckline of an Inverted Head & Shoulder pattern at the 680 level on a weekly chart, accompanied by a robust bullish candle in late November 2023, signaling the initiation of a strong uptrend.

The stock has successfully breached its 'Multiple Resistance Zone' at 754, indicating a positive bias in its current trajectory. It witnessed a breakout with strong volume, signifying an influx of market participation at the breakout. The weekly and daily strength indicator RSI is on a bullish trajectory, holding above its reference line and indicating a positive bias.

The near-term target stands at 874, with a potential move towards 916.

Technical analysis of LIC

Inverted head & shoulder pattern: The inverted head and shoulders pattern, a bullish reversal pattern, suggests a potential upward trend in the security's price.

Multiple resistance zone breakout: The breakout from a multiple resistance zone indicates a potential shift in the security's price trend.

Volume Activity: The increase in volume at the breakout suggests heightened market participation and potential strength in the new price movement.

RSI: The relative strength index (RSI) is a momentum indicator used in technical analysis. RSI measures the speed and magnitude of a security's recent price changes to evaluate overvalued or undervalued conditions in the price of that security.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.