Hold above 10,550 can trigger rise in short term

By Sameet Chavan

Traders are advised to trade with a negative bias as the upside is pegged at 10,941 levels whereas the downside target comes to 10,050 levels, hence the risk to reward ratio is more than 1:2 on the short side, according to technical analysts. They have identified Colgate-Palmolive, Marico, Britannia, PTC, Zee Entertainment and GSFC, which have an upside potential of 15-20% over the next few months

Where we are: While the November expiry week ended on a promising note, the market participants were completely baffled with the market moves in the week gone by. The earlier breakout zone of 10,770-10,800 was expected to act as a support on the pullback moves, but a plunge in the global markets kept caught market participants on the wrong foot as index breached this range with a downside gap.

What is in store: Five state election results on Tuesday and the verdict of the Brexit deal are likely to have a significant impact on our markets as well and hence, this could well be the week, which would determine the short- to medium-term trend for our markets. As far as levels are concerned, major supports are seen at 10588-10489 and a breach of this could result into a sharp correction. On the flipside, the recent high of 10890–10940 is the resistance end which if breached, would lead to strong up move.

What could investors do: Amongst the sectoral indices, the Nifty Bank index rebounded higher from its support zone in Friday’s session. In case the market moves higher in the coming week, then the Nity Bank could be the outperforming index. At this juncture, we like ‘Dmart’ which has clearly been bucking the trend. One can look to go long for a target of Rs 1,710 and stop loss at Rs 1,397. Britannia looks promising for some immediate upside of Rs 3,280 and stop loss at Rs 2,880. From the midcap space, ‘Sun TV’ formed a Dragonfly Doji pattern, which could give a decent move towards Rs 640 and stop at Rs 568. All these should be considered if there is no unfavourable outcome during the week.

The author is Chief analyst – technical & derivatives, Angel Broking.