3 stock ideas from Rajesh Palviya for the week ahead

“Nifty is now holding above the major put-based concentration of 21,800-21,900; if these levels are intact in the coming trading session then possibly we can see a target towards 22,300 in the continuation of this up move for Nifty spot,” said Rajesh Palviya of Axis Securities. Edited excerpts:

What move are you expecting to see in the markets ahead? Also, what is your outlook on the broader indices?
Nifty is comfortably trading above 21,850, which was the major supply area. And if we look at the weekly close, this is the highest weekly close which we are registering today on Nifty. Looking at the overall data setup, there was a short covering in earlier days and then was followed by the long built-up setup in Nifty, which clearly shows this momentum can extend further.

Nifty is now holding above the major put-based concentration of 21,800-21,900; if these levels are intact in the coming trading session then possibly we can see a target towards 22,300 in the continuation of this up move for Nifty spot. Overall, the structure is bullish. Most of the sectors are now contributing to this rally, be it IT, metal, cement and other sectors. Banking has also started contributing to this upward momentum. So, the broader market is clearly indicating that this rally can extend in the coming week and one should remain on the long side of trade with a stop loss of 21,800 and upside target 22,300.


Bank Nifty is still showing a little underperformance compared to Nifty. But overall, from a near-term perspective, the trend is likely to be on the bullish side. Bank Nifty has also witnessed a long built-up setup. If it holds above 46,200 in the coming week, then possibly this rally can extend towards 46,600 to 46,800. And we believe that PSU banks can contribute to this rally and some of the private banks have also started recovering. So, we may see banking stocks also performing in the coming week.

We have seen quite the run-up in auto. M&M has done pretty well, up 7.5% for the week. Do you see some more legs to rally in the auto segment?
Most of the auto stocks are doing good and looking at the overall structure most of the stocks are almost near their all-time high trajectory – be it Maruti, Mahindra & Mahindra, Bajaj Auto. All these stocks are doing good and the kind of buying interest which we are seeing in this volatile market shows that we can see further traction in these stocks. Our preferred choice from this pack is Mahindra & Mahindra. The recent breakout is clearly showing that we can see further traction in M&M and possibly we can see target of 2000 on a positional basis. So, one can adopt a buy-and-accumulate strategy for M&M and possibly in the coming weeks we can see this rally extend higher. Even Maruti is enjoying all-time high trajectory and the kind of buying interest which we are seeing above the 11,000 mark clearly shows that now this momentum can exceed further. On the higher side, we can possibly see the targets of 11,800 to 12,000; so that stock is also looking promising. Tata Motors is clearly an outperforming stock. Bajaj Auto from the two-wheeler space is also looking bullish. So, I think these four stocks one can look to buy from the automobile space at this moment.

Share with us your stock-specific strategy going for the next week.
First stock is from the pharma itself – Ipca Lab. It is looking very promising; there is very strong buying action. In today's session, short covering was clearly there. The stock is now penetrating to its previous swing high. Volume action on a weekly basis clearly shows that Ipca Lab can continue further upside. Rs 1290 is the next target we are expecting for the stock in short term. So, one can buy with a stop loss of 1215. The second stock is from the IT pack, and that is Wipro. Very strong buying action on a daily, weekly, monthly timeframe. The stock is outperforming. After a long consolidation on a monthly as well as on the yearly chart, the stock is breaking out and the kind of breakout which we are seeing and the series of higher top, higher bottom formation on the daily chart clearly shows that Wipro can continue outperformance. Rs 570 is what we can see on the higher side in the short term. So, one can buy Wipro with a stop loss of 525 and the third stock is from midcap space, that is Gujarat Pipavav Port. If we analyse the overall structure, the stock is in an uptrend. A series of higher top, higher bottom formation is taking place. The stock managed to give a breakout on a daily, weekly timeframe of its falling trend line. There was a very strong buying action in the last couple of trading sessions. We believe that GPPL can continue further upside and a possible target for Gujarat Pipavav is Rs 230. So, one can buy this stock with a stop loss of 190.