Tata Power among 3 stock ideas for next week: Kunal Shah

Keeping a watchful eye on price action and employing appropriate risk management strategies is essential to navigate through such periods of uncertainty in the market, he said.

Edited excerpts from an interview:

As the 20,000 mark remains elusive, how big is the resistance at 19,800-mark for Nifty?
The index experienced a sharp correction from higher levels, and the resistance at 19800 is acting as a significant barrier for the bulls. However, the bulls are attempting to defend the index from lower levels and prevent further downside. If the index breaks below the support level of 19550, it may indicate further correction towards the 19400 levels, suggesting continued bearish sentiment in the market.The current trading range for the index is between 19550 and 19800. A break on either side of this range will likely lead to trending moves in the market. Traders should closely monitor the index’s price action and be prepared for potential trading opportunities based on the breakout direction.

What should be the trading strategy in the new August series given FIIs have decreased their longs in the July series?
The current undertone for the market is neutral, indicating that there is no clear bullish or bearish bias. Traders who are holding long positions should consider setting a stop loss at 19550 to protect their investments in case the market experiences a downside move.The market is likely to enter a consolidation phase for a few days, during which it might trade within a range. This consolidation presents trading opportunities for both long and short positions. Traders can consider buying near the support level at 19550 and selling or shorting near the resistance level at 19800.During consolidation, it’s crucial for traders to be flexible and adapt to changing market conditions. Keeping a watchful eye on price action and employing appropriate risk management strategies is essential to navigate through such periods of uncertainty in the market.

After the 5% drop seen in shares of ITC this week, what is the technical outlook ahead? Do you see chances of a bounce back?
The stock has been a strong outperformer in the entire FMCG sector, showing significant growth. However, after rumors of a demerger, some profit booking was observed at higher levels, indicating a temporary pause in the uptrend.The stock’s recent price action formed an inside bar doji candle on the daily chart. An inside bar represents indecision in the market, where neither bulls nor bears have gained full control. This candlestick pattern suggests that the stock may be entering a period of consolidation or uncertainty.The lower-end support for the stock is at 450, meaning that if the stock price declines to this level, there might be potential buying interest, providing a cushion for the stock. On the other hand, the resistance level is at 475, and if the stock price breaks above this level, it could lead to trending upward moves, potentially indicating a resumption of the previous uptrend.

Nifty Pharma rallied over 4% in the week amid Q1 earnings. How do you read this upside and which stocks look strong on the charts?
The long-term chart of the Pharma sector indicates that it has bottomed out, which suggests that the sector may have completed its bearish phase and is now poised for potential growth in the future. This could be an indication that the sector has strong potential for a bullish trend in the long run.

Within the Pharma sector, there are some specific stocks that appear to be extremely bullish:
Cipla: The stock of Cipla is showing strong positive signs and has the potential for significant growth. Traders and investors may consider CIPLA as a potential buying opportunity, considering the positive outlook for the Pharma sector.

Natco Pharma: Another stock with an extremely bullish outlook is Natco Pharma. The company’s stock is showing signs of strength, and it might be worth considering for long-term investors looking to take advantage of the positive momentum in the Pharma sector.

RPG Life: The stock of RPG Life Sciences is also indicating a strong bullish trend, making it another potential buy opportunity in the Pharma sector.

Give us your top 3-4 ideas for the week ahead.

BUY LIC Housing Finance at Rs 410 , SL-390, TGT 430/450
The stock has experienced a significant breakout on both the daily and weekly charts with a sharp surge in trading volumes. This breakout indicates a potential bullish trend reversal in the stock.The momentum indicator RSI has given a positive crossover, confirming the presence of buying pressure in the stock and suggesting that bullish momentum may be building up.The stock has a strong support level at 390, which is expected to act as a cushion for any potential downside movements.With the breakout and positive momentum, the stock has the potential to reach upside targets of 430 or even 450 in the near future.

BUY Tata Power at Rs 235 , SL-220 TGT 250/260
The stock has experienced a significant breakout on the daily chart, accompanied by a sharp surge in volumes. The momentum indicator RSI has shown a positive crossover, confirming the strength of the stock’s current uptrend. The stock is currently in a strong uptrend, characterized by higher high and higher low formations. The stock has support around the 220 level, which is likely to act as a cushion for the bulls. On the upside, potential targets for the stock could be around 250.

BUY NCC AT 147 , SL-142, TGT- 157/160
NCC has experienced a consolidation breakout on the daily chart and is currently holding above a critical moving average. The RSI indicator is showing a bullish crossover, indicating positive momentum. The stock has the potential to reach 160 levels in the near term. On the downside, it has support at 142, which may act as a crucial level for any corrective moves.