'Nifty likely to remain in 10,520-10,690 range, advise stay-stock specific action'

It is advisable to trade on stock specific opportunities with strict stop loss. We continue to maintain a rangebound trading level for index at 10690 levels on upside and 10520 levels on downside

Despite remaining positively flat on the week-to-week basis, the Indian equity market stayed resilient to global sell-off rout on account of strong macro data with inflation coming lower at 3.31 percent coupled with RBI’s OMO to inject liquidity worth Rs 12,000 crore through a purchase of government securities.

Further, a substantial fall in crude oil price from USD 86 levels to currently at USD 65.88 levels aided the market with positive sentiment on easing deficit concerns.

During the week under review, Nifty managed to breakout from immediate resistance of 10,616 levels on intraday basis to touch weekly high of 10,651 levels, but lack of conviction at higher level dragged the index. It made a weekly low of 10,440 levels but managed to bounce and closed the session at 10,616.70 levels with gain of 0.29 per cent on week-to-week basis.

The rally was primarily led by Nifty Bank and consumption which was up by 1.51 percent and 1.15 percent, respectively, on a weekly basis. However, Nifty IT and pharma were among sectors that declined by about 3.01 percent and 2.51 percent respectively in same period.

On weekly price chart, the Nifty index formed a ‘hanging man’ kind of candlestick pattern for a consecutive week, partly indicating a lack of strong direction.

The weekly RSI on chart stood at 46 levels down from earlier level, while MACD continued to trade below its signal-line. With positive level on closing basis this week, the resistance is seen at 10,650-10,712 levels for the index and support at 10,440 levels.

The softening of crude oil price and gradual easing of deficit concerns coupled with prompt course of action by RBI to keep liquidity afloat is expected to market sentiment on positive curve.

However, given rangebound trade for consecutive sessions with lack market direction, it is advisable to trade on stock specific opportunities with strict stop loss. We continue to maintain a rangebound trading level for index at 10,690 levels on upside and 10,520 levels on downside.

Here are the top stock trading ideas which can give good returns in the near term:

VIP Industries: Buy | Target: Rs. 492 | Stop loss: Rs 450 | Upside: 5%

After remaining on sideways direction in last one month, VIP Industries recently made a strong upward trend on weekly basis to decisively breach above its 100-days moving average level placed at Rs 457 levels.

It witnessed a substantial fall from 52-weeks high with about 42 percent in last three months, but taking a strong support at Rs 370 levels, it reversed the trend to form bullish regime. The scrip made a solid bullish pattern on its daily chart coupled with small bullish candlestick pattern on weekly chart which also saw price rejection at lower level.

Apart from positive volume growth, the momentum indicator outlined a positive trend at current level with RSI placed at 57 levels, while MACD is expected to witness bullish crossover in coming session.

We have a buy recommendation for VIP Industries which is currently trading at Rs 468.30

Pidilite Industries: Buy | Target: Rs. 1150 | Stop loss: Rs 1030| Upside: 4%

Pidilite Industries witnessed a strong upward momentum over one month after making a healthy consolidation from an upper price-band of Rs 1189 levels towards a low of Rs 900 odd levels. Post this lower level, the scrip continued to trade on positive trajectory making a crucial breakout from its 200-days moving average placed at Rs 1013 levels on closing basis.

Along with strong volume growth, the scrip also formed a bullish candlestick pattern on its weekly price chart. Further, the momentum indicator favored the current trend with RSI at 65 levels coupled with MACD trading above its signal line.

We have a buy recommendation for Pidilite industries which is currently trading at Rs 1108.25.

Motherson Sumi Systems: Sell | Target: Rs 139| Stop loss: Rs 160| Downside: 3%

Motherson Sumi remained under selling regime throughout the week to trade near its 52-weeks low of Rs 146 levels, and continued to decline from a price band of Rs 170 levels toward a low of Rs 147 levels on weekly basis.

The scrip further slipped from all the moving average level especially 200-days EMA placed at Rs 242 levels over last one month, and thus indicating a sustain pressure for the scrip. The scrip continued to form long bearish candlestick pattern on both daily and weekly price chart, and strong support currently placed at Rs 137 levels.

The RSI stood at 28 levels while MACD trades substantial below its signal-line which is expected to keep scrip in downtrend.

We have a sell recommendation for Motherson Sumi which is currently trading at Rs 143.50.

Disclaimer:- The views and investment tips expressed by investment experts are their own. Ripples Advisory advises users to check with certified experts before taking any investment decisions.

Best Share Market News, Click Here To Get More News - Nifty Futures, for 2 Days Free Trial give a missed call @9644405056 and Get Share Market Services.