Stock Picks by Sameet Chavan: Buy ITC, Sell Dr Lal PathLabs

Clever outlook

Yet another Monday started off with a gap and this time it was a pleasant surprise in the upward direction. Subsequently, the benchmark consolidated in a range throughout the day maintaining its positive posture. Among some good stock specific action, Nifty managed to recover the 14,950 mark on day one. Everything looked rosy and things were set for an escape from the recent phase of congestion. However, all of a sudden, global markets looked a bit choppy and started to correct sharply from their recent highs. This had a rubbing off effect on our markets which caused the index lower to conclude marginally within the sub-14,700 territory.

Weakness across the world has become the real spoiler and has not allowed our markets to move beyond the recent range of consolidation. But, we also have to accept the fact that we have outperformed our global peers significantly because we haven’t fallen in step with the global indices. In the end, we are still left without direction and completely unaware of the direction we are currently taking. It would be wise to mention a few key levels and monitor them closely in the first half of the coming week. Regarding support, 14,540, followed by 14,400, are to be considered as key levels. A sustained move below the lower range would certainly reduce the possibility of some near-term positivity. On the other hand, 14,750 – 14,830 should be considered as major obstacles. If we are to regain strength, Nifty must first go beyond 14,830.

As in the previous week, we witnessed many thematic movements taking place one after the other. It wasn’t until Friday that there was no clear winner and, in fact, the market as a whole saw a decent correction, which is not an encouraging sign.

We advise traders to keep a tab of all of the levels mentioned above and continue with an equity-centric approach. In addition, it is

It is advisable to stay light and avoid aggressive bets until global volatility decreases.

Stock recommendations:

NSE script code – ITC

View – bullish

Last closure – Rs 212.25

Justification – It is one of the actions most appreciated by investors as well as by the fraternity of traders. But he failed miserably to meet his expectations time and time again. Let’s see what the short term trend looks like. The overall price action between November 20 and early February of this year has been excellent; but since then we have seen a complete lull in the stock. After experiencing some correction from recent highs, the stock entered a consolidation mode and spent some time around its cluster of key moving averages. On Friday we unexpectedly witnessed a surge in prices as well as large volumes. So, in the hope of keeping the momentum going, we recommend going long on a slight dip towards 209 – 207 for a target of Rs. 222 in the coming days. Strict stop loss can be placed at Rs.202.

NSE script code – LALPATHLAB

View – bearish

Last closure – Rs 2,719.45

Justification – This pathology stock appears to have lost its luster now as we are seeing consistent corrective action over the past few weeks. Taking a look at the daily chart we can see the price sliding below its key 2800 support at the close. Regarding prices, it confirmed a “Lower Top Lower Bottom” on the daily chart, which is a sign of weakness in the near term. Since it has already moved far away from recent highs and is approaching its strong support zone, we recommend selling for a cautious downward movement. Momentum traders may look to go short to a target of Rs. 2600 in the coming days. The strict stop loss can be placed at Rs 2,792.


Disclaimer: Sameet Chavan is Chief Technical and Derivatives Analyst at Angel Broking. The analyst can have positions in one or more stocks. Opinions are personal.

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