Nifty likely to consolidate in Diwali week! 7 trading ideas for November series that could give up to 10% return

Indian market fell more than 2 per cent for the week ended October 29 pushing benchmark indices below crucial support levels.

The Nifty50 which hit a record high of 18604 on 19 October has fallen by about 1,000 points since then to close at 17,671 as on October 29.

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Sell off which was largely led by muted corporate results, weak global cues, and selling by foreign investors could weigh on D-Street in this week as well ahead of the 2-days US Fed meet.

"Globally, the outcome of the US Fed meeting on 3rd November will be the most important cue where it will be important to see how Fed will react amid rising inflation and slow-down in growth momentum," Santosh Meena, Head of Research, Swastika Investmart Ltd, said.

Technically, due to this late dominance from bears, we can observe few important developments on charts. We are seeing ‘Lower Top Lower Bottom’ on the daily chart after breaking below 18000, which coincided with the violation of the key short term moving average of ’20-day EMA’, suggest experts.

Experts advise investors to stay light and avoid any kind of bottom fishing. Crucial support for the index is placed at 17450-17200 while on the upside 18000 is likely to act as key resistance.

“On the monthly chart, we can see a formation of ‘Shooting Star’ pattern, which certainly does not bode well for the bulls. Going ahead, since the market is a bit oversold, we may see some relief move in between; but traders should not get carried away by such rebounds,” Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel One Ltd), said.

“On the higher side, 18000 – 18100 would now be seen as immediate hurdles and any bounce back towards it, should be used to lighten up longs,” he said.

On the flipside, Chavan further added that we may see this corrective move extending towards 17450 first and if things worsened then the possibility of sliding towards 17200 – 17000 cannot be ruled out. We reiterate on staying light and avoiding any kind of bottom fishing for a while.

We have collated a list of 7 trading ideas from various experts for the November series. Returns are calculated based on the closing price as of October 29:

Expert: Aditya Agarwala, Senior Technical Analyst, YES SECURITIES

UPL: Buy| LTP: Rs 740| Target: Rs 800| Stop Loss: Rs 700| Upside 8%

The stock is on the verge of a breakout from a consolidation upper end suggesting a resumption of uptrend is on cards. Further, the RSI indicator is also confirming the bullishness building up in recent times.

Escorts: Buy| LTP: Rs 1570| Target: Rs 1665| Stop Loss: Rs 1500| Upside 6%

The stock has broken out from an Ascending Triangle pattern neckline placed at 1570 on higher volumes suggesting bullishness. Further, the RSI indicator is also confirming the strength in the stock.

Pfizer: Buy| LTP: Rs 5046| Target: Rs 5400| Stop Loss: Rs 4860| Upside 7%

The stock has halted at key trendline support formed joining major previous lows. Further, a sustained trade above 5200 will resume the uptrend taking the stock higher to levels of 5400.

The RSI has also turned upwards from oversold territory suggesting that the downtrend is losing steam.  

Expert: Palak Kothari, Research Associate at Choice Broking.

Tata Steel: Buy| LTP: Rs 1316| Buy in Rs 1315-1300 range| Target: Rs 1380| Stop Loss: Rs 1270| Upside 5%

On the monthly chart, the stock has been trading in the higher territory with a good volume activity, which confirms a bullish trend for the long term.

On the weekly timeframe, the price has been finding support at the Middle Bollinger Band and forming a Bullish Flag Pattern which indicates strength in the stock.

On the daily timeframe, the price has taken good support at the 100-Days Exponential Moving Averages and the prior support levels at around 1273 levels.

So based on the above technical structure, we are recommending a buy position in the stock for the medium to long term.  

TVS Motor: Buy up to Rs 650| LTP: Rs 665| Target: Rs 720| Stop Loss: Rs 620| Upside 8%

After making a 52-week high at 666 levels, the stock has shown a correction from the top and made a low at Rs 495 level and then bounced back, which is 38.2% retracement level of its previous up move.

On the daily chart, the stock has given a breakout of the rounding bottom formation which points to a bullish momentum in the counter.

Additionally, the price has also moved above the upper leg of the “Bollinger Band” that suggests a bullish rally is likely to continue further in the near-term.

Furthermore, the stock has been trading above 21, as well as 50-Days Moving Averages, which is a bullish crossover that shows a positive trend for the time being.

A daily momentum indicator RSI and Stochastic both have shown positive crossover, which adds more bullishness to the price. Hence, based on the above technical structure one can initiate a long position in TVS Motor.

Ambuja Cement: Buy up to Rs 400| LTP: Rs 404| Target: Rs 435| Stop Loss: Rs 380| Upside 7%

On the monthly chart, the stock has given a breakout of a major resistance level of 291 and showed straight upside movement, which indicates an upside rally in the counter.

On a weekly chart, the stock has formed a piercing candlestick pattern which points out upside movement in the counter in upcoming sessions.

Furthermore, the stock has given closing above 21-Days Moving Averages, which shows a positive trend for the time being. Hence, based on the above technical structure one can initiate a long position in Ambuja Cements.

Expert: SMC Global Securities Ltd

Cholamandalam Investment and Finance: Buy| LTP: Rs 615| Target: Rs 680-700| Stop Loss: Rs 570| Upside 10%

The stock made a 52-week low at Rs 234.50 on 29th October 2020 and a 52-week high of Rs. 634.05 on 29th October 2021.

The 200-Days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 510.79.

The stock was consolidating in wide range of 480 to 600 levels for six months and formed an “Inverse Head and Shoulder” pattern on weekly charts which is bullish in nature.

Last week, the stock has given the pattern breakout along with good volumes and also has managed to close above the breakout levels.

On the technical indicators, front such as RSI and MACD are also suggesting buying for the stock. Therefore, one can buy in the range of 605-609 levels for the upside target of 680-700 levels with a stop loss below 570 levels.

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)