IT stocks may deliver smart returns in short term: Rupak De of LKP Securities

The bullish crossover on the momentum indicator RSI further confirms the upward momentum. “Based on these factors, it is recommended to maintain investments in tech stocks for the short term, as they are expected to continue their upward movement in the coming days,” he says. Edited excerpts:

Nifty’s overall chart pattern is maintaining a bullish overtone. How big is the resistance at 19,500-mark?
The Nifty index’s break above the consolidation range of 19300-19500 suggests increasing optimism in the market. The resistance at 19500, which was heavily built by Call writers, has been surpassed on a closing basis. This breakthrough is expected to lead to a significant rally as the Call writers unwind their positions. The bullish crossover on the momentum indicator RSI reinforces the upward momentum. The Nifty may potentially reach levels around 19700-19720, but it’s important to consider the short-term support at 19300.

What should be the trading strategy for Nifty Bank traders? Will it continue to underperform?
Bank Nifty is facing significant resistance at 45000, hindering its upward movement. As long as it remains below this level, a clear directional up move is unlikely. Support is established at 44700 on the lower end. The bullish crossover on the momentum indicator RSI suggests positive momentum. Going forward, the index may continue to consolidate with the bands of 44500-45000; any decisive breakout on either side may create a directional trend.

IT stocks have been a surprise this week. What’s your prediction looking at the Nifty IT chart? Which is the best placed stock for the new week?
IT stocks have experienced a remarkable rally, resulting in a bullish breakout for the Nifty IT index. This surge in prices has pushed the index above a critical moving average, signalling a positive trend. The bullish crossover on the momentum indicator RSI further confirms the upward momentum. Based on these factors, it is recommended to maintain investments in tech stocks for the short term, as they are expected to continue their upward movement in the coming days.

HDFC Bank is announcing its quarterly result on Monday. Given the past trajectory, what should be the best trading strategy for the stock on Monday before the results are announced?
The stock has experienced a significant decline in recent times. However, when considering the longer-term view, it is observed that the stock is maintaining a higher top higher bottom formation, indicating a potential reversal. It is suggested to initiate a long trade with a stop loss placed below the previous swing low of 1579. On the upside, the stock may move towards the target level of 1805.

Mazagon Dock has been the top gainer with about 24% rally in a week. What are the targets?
After a consolidation breakout, the stock has experienced a sharp upward movement. However, it appears that the stock is now ready to enter a consolidation phase before making any further moves. Traders can consider buying the stock on dips, as the overall trend remains positive, and any downward movements are expected to be met with buying interest.

Give us 2-3 stocks that would be on top of your watchlist in the coming week.

Buy ICICI Bank Rs 964. Target price: Rs 1060 Stop loss: Rs 924
The stock has recently surpassed the swing high on the weekly chart, indicating a bullish breakout. Furthermore, it is maintaining its position above an important moving average, which suggests a positive trend. The weekly RSI shows a bullish crossover, adding to the bullish sentiment. These factors imply potential further upside for the stock in the near term. There is potential for further upside moves towards levels of 1060. Immediate support for the stock is found at 924.

Buy Hindalco Rs 447. Target price: Rs 500 Stop loss: Rs 424
Hindalco has recently broken out of a falling trendline, suggesting a rise in optimism. The weekly chart also shows a bullish Marubozu candle at the closing. The daily RSI is in bullish crossover with current reading of 67, indicating strong momentum. There is potential for further upside moves towards levels of 480 and 500. Immediate support for the stock is found at 425-430.