Here is why Natco Pharma is the stock to buy this week
The Nifty has shown weakness recently, as it has experienced a decline for two consecutive days. On a smaller time frame, the index slipped further. Additionally, the Relative Strength Index (RSI) indicates negative divergence, indicating a weakening bullish momentum. Looking at the support levels, there is visible support at 18,500, and if the index breaks below this level, it could potentially drop towards 18,200. On the other hand, there is resistance at 18800 on the higher end of the index.
The Bank Nifty index witnessed an ongoing battle between the bulls and bears throughout the week. The index faces resistance at the 44,000 level, where the highest open interest is built up on the call side. On the other hand, support is observed at the 43500PE level, where put writers are active. A break on either side of this range is likely to result in a directional move for the index. However, the overall sentiment remains bearish as long as the index stays below the 44,000 level.
Meanwhile, the Nifty Pharma index has shown resilience despite overall selling pressure in the market. In fact, the index has experienced a breakout above a falling trendline, indicating a shift in the trend towards the positive side. Additionally, the index is comfortably sitting above a critical moving average, further supporting the notion of a potential upward movement.
Looking ahead, there is a possibility for the Nifty Pharma index to climb higher in the medium term, with a potential target range of 14,000-14,500. This suggests a bullish sentiment for the pharmaceutical sector. On the downside, there is a notable support level at 12500, indicating a level at which the index could find stability during any corrective moves.
Here are two stocks to trade this week:
TVS Motor Company
Recommendation: Sell | Stop Loss: ₹1,270-1,250 | Target: ₹1,331
TVS Motor has experienced a decline below its recent consolidation phase. Furthermore, it has fallen below a critical moving average, indicating a bearish trend. The RSI has also shown a bearish crossover, signalling a potential downward movement. On the lower end, the stock may fall towards the range of 1250. Conversely, there is resistance at 1331 on the higher end, suggesting a level where the stock’s upward movement may face challenges.
Natco Pharma
Recommendation: Buy | Stop Loss: ₹640 | Target: ₹750
The stock recently experienced a strong breakout on the daily chart, accompanied by a sharp surge in volumes. Additionally, it also had a weekly breakout, surpassing the previous five-week high. The momentum indicator RSI has shown a positive crossover, confirming a buy signal. The stock has support at 640, and the potential targets for the upside are 750.
The author is Rupak De, Senior Technical analyst at LKP Securities
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.live updates on
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Updated: 25 Jun 2023, 12:18 PM IST
Ganesh
http://ganesh@finplay.inFinance enthusiast, Mutual fund expert.