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nooresh merani: Two stock ideas for next week by Nooresh Merani

“A short term breakout has already taken place on the Nifty as well on the Bank Nifty,” said Nooresh Merani, independent technical analyst. Edited excerpts:

The Nifty scaled a very important level of 17800 while the Bank Nifty touched 40,000 this week. What should we watch out for next ?

A short term breakout has already taken place on the Nifty as well on the Bank Nifty. We are taking a little bit of a pause going into the weekend but overall the view remains the same. Traders should keep a stop loss and ride on to the move. We have continued to make higher tops and higher bottoms so for now 17600 or 17720 can be kept as stop loss if somebody has an extreme short term target in mind.

Similarly for the Bank Nifty 41000-41200 is a target now and a trailing stop loss can be placed closer to that 40000 mark. So overall the bias is positive. There would be stock specific and sector specific rotations.

The week belonged to a lot of these cement stocks. saw a solid up move. We are also having that discussion in terms of Ultra Tech Cement versus . If you have to look at the technical charts and tell us your top picks from the sector what would that be?

I would go with Ultra Tech as the rest of the names actually saw some bit of profit booking. Even

has come back to retest that 6750-6780 breakout point. So that would be a buy around those areas with the strict stop loss at 6700. Shree Cement has already done a large move so I would go with say a buy on UltraTech Cement only in the sector.

On the FMCG pack although the stocks were very dead in the week gone by be it , or , the fundamental news is that palm oil prices have hit a 52-week low which could be the next trigger for all of these FMCG companies. So are these stock prices on the technical front preparing themselves for the next up move?

Looking at the largest name in the sector which is

, the problem is that it is a very difficult chart to understand because the trend has not been great.
It has a bunch of resistance around that 2800 mark which is the previous stop. Also the fact is the stock was at 2400-2500 in April 2020 in the recovery of COVID itself and since then it has been around that 2400 mark for the last two-two and a half years. So the trend is not great across these FMCG names. One has to play them only when there is a lot of despondency in terms of the price fall is bad, the news is bad, that is the best time to get into a lot of these FMCG names which are defensive in nature.

So currently a palm oil move indicates there should be some momentum. I would be a little wary of this momentum trade on FMCG so we should avoid these stocks. The only FMCG stock which is coming up on our radar is

. which has broken out and is still holding on.

What are the stock specific ideas that you have for us?
Again we will be focussing on the banking names. We have seen a new 52-week high on

that looks set for further momentum given that we have already moved up quite a bit across the board. We would go for a strict stop loss at 540 and a target price of 590. Second would be which is yet to catch up with the whole banking rally, the stock is trying to make that breakout move of 1500 if it does so it could go towards 1600. Keep a strict stop loss at 1475.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)

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