Hot Stocks | Alembic Pharma, Siemens can give up to 15% returns in the next 3-4 weeks
Episode 2132, Jan 20, 2020, 02:00 AM
The apt strategy to trade in such a market would be to play the range i.e. buy as close as possible to support and vice versa.
Last week had been a week of consolidation for our market as we saw Nifty gyrating in a slender range of merely 100 points.
However, the overall bias remained positive despite some small intraday hiccups. The stage was set on Monday itself when we clocked fresh record highs, well above the 12,300-mark on a closing basis.
Eventually, the muted week for benchmark index ended with gains over seven-tenths of a percent.
If we just have a glance at the Nifty’s price action for the entire week, it does not portray the real picture. Because although the index did nothing, there was a bundle of stocks from the broader market that did exceedingly well and kept the street buzzing throughout the week.
The only disappointing factor was the underperformance of the banking space as it became the real culprit for Nifty remaining in this tight range.
Nevertheless, we still remain upbeat and expect the index to slowly-steadily head towards the next millstones of 12,400 – 12,500.
The apt strategy to trade in such a market would be to play the range i.e. buy as close as possible to support and vice versa.
As far as support levels are concerned, 12,278 – 12,220 becomes a key zone for the index.
We have been quite vocal about the midcap index for the last few weeks and looking at its recent stellar run, the recent anticipation finally turned into a reality.
It is moving towards a strong hurdle now and since a bit overbought, we may see in between some profit-booking in the coming days.
But mind you, by no means, it would be a trend reversal as we expect the midcap basket to unfold further legs of the rally in the coming weeks.
Apart from this, the notable mover on Friday was the entire pharmaceutical basket, which has broken above the major barrier of ‘200-SMA’ on the daily chart.
Do watch out for this space as we expect some good traction in this underperforming sector.
Here are two buy calls for the next 3-4 weeks:
Alembic Pharmaceuticals | Buy | LTP: Rs 599 | Target price: Rs 690 | Stop loss: Rs 551 | Upside: 15.2%
The pharma space has finally joined the bull’s party as we can see this index confirming a bullish reversal ‘Inverse Head N Shoulder’ breakout along with prices, crossing above 200-SMA with some authority.
This stock too has broken above its hurdle of Rs 590 which thrice acted as stiff resistance in the last few months confirming a Cup N Handle bullish breakout.
In addition, in the last few sessions, the up move has been supported with a sizeable increase in volume, indicating strong buying interest at multi-month highs.
After a sharp up move from the levels of Rs 1,086 to Rs 1,717, the stock prices have witnessed correction in the last few months.
The said correction, however, got arrested around the 100-EMA and after forming a base for a month, the stock prices have resumed the primary uptrend by confirming a range breakout.
Prices have closed above the higher band of Bollinger band, suggesting a trending up move after the recent consolidation.
Momentum oscillator RSI has also entered a positive zone, supporting the buy call.