What are the technical charts indicating for this week?
Largecaps like HDFC Bank and HDFC managed to underperform significantly in the first half of this week but the second half of the week was very encouraging. Not just the indices came back strongly, a lot of those beleaguered largecap names made a comeback. For example, ITC made a very strong comeback. is inching towards its breakout zone.
With many largecap names participating, this time the market (Nifty) may break the 16K mark with a new set of stocks rather than old names.
There are a lot of factors to watch out for. The most important factor is the expiry week next week because expiry weeks tend to be trend-changing in nature. We need to see whether there is a sentiment carry forward where the market remains buoyant and trading gets index specific. If that happens, then we can expect that the next week and the start of the fresh series could be on a much stronger and a decent mode for the indices. I expect that the index would keep on marching up higher but it could probably be with a fresh set of stocks.
Which stocks are you eyeing now?
ITC and Bharti Airtel could be a few of the top candidates which looked far more stronger in the second half of the week. I think they are the ones which the market will probably be eyeing.
Look at the way cement stocks have shown a durable price uptrend. Names like ACC, Ambuja and UltraTech Cement have done phenomenally well over the last couple of weeks. There is a lot of expectation that the momentum would carry forward.
There are two key pockets of underperformance. One of them is the banking index. A lot of private sector banks need to fire. They are still not showing any major signs of a reversal. The more concerning factor has been the underperformance of auto stocks, specifically largecap names like Maruti Suzuki and Bajaj Auto.
What’s in store for Bharti Airtel?
There is a very interesting price pattern getting formed in Bharti Airtel. When you look at the charts from the lows of March 2020, it has formed a classical bullish flag and a pennant kind of formation. Over the last 5-6 months of this price pattern, the range is getting contracted. These are typical price patterns which tend to give a breakout whenever you see a sudden contraction in terms of price ranges. So I expect that the range breakout could probably happen on the upside with both the prices indicating a contraction as well as Call writers unwinding their positions. On the back of it, if a breakout on the upside happens, we could be looking at the stock hitting back towards Rs 600-620 mark.