By Om Mehra, technical analyst at Samco Securities
The Indian market has stood strong, outpacing major global indices, as evidenced by the Nifty's 1.24 percent surge in April. In the last five years, the conventional 'Sell in May and Go Away' approach has demonstrated diminished effectiveness—in 2019, an election year, the month of May yielded a positive return of 1.49 percent.
So far, the Q4 results have been impressive and in line with market expectations. While the ongoing geopolitical tension in the Middle East has cooled off, these factors may positively impact the domestic market in the coming months. However, traders must trim their excessive exposure to small and mid-caps as we see more potential in blue-chip companies.
The Nifty index has been supported across sectors on a rotational basis and hit a record high of 22,784 on April 30. The index closed 39 points lower at 22,605. As long as the Nifty remains above 22,300, corresponding to the 50 DMA, the short-term correction can be viewed as a buying opportunity.
The Bank Nifty opened higher but ended the session at 49,396.75, down 27 points. The bank index put in a stellar performance in April with a return of 4.82 percent. Nifty private banks and PSU banks contributed to this surge, maintaining the index above crucial short-term moving averages.
Technically, the weekly chart displays a strong bullish candle marking 48,350 as a strong support.
Here are three buy calls for the short term:
The stock is forming higher highs and higher lows, indicating a sustained uptrend. It is trading comfortably above its short-term (20-day) and medium-term (50-day) moving averages. The RSI (relative strength index) is comfortably holding at 54 and is steadily rising. The stock holds levels above Rs 650, which previously served as a resistance, indicating buying interest among short-term traders.
Based on the above technical structure, one can initiate a long position at the CMP of Rs 674 for a target price of Rs 735. The stop-loss can be kept at Rs 645.
Havells India: Buy | LTP: Rs 1,664 | Stop-Loss: Rs 1,600 | Target: Rs 1,750 | Return: 5 percent
Havells is currently displaying robust bullish momentum, with consistently higher highs and higher lows. The stock is trading above key moving averages, including the short-term (20-day) and medium-term (50-day) averages, further solidifying its bullish stance. The RSI remains at 73 levels.
With this compelling technical structure, one can initiate a long position at the CMP of Rs 1,664 for a target price of Rs 1,750. The stop-loss can be kept at Rs 1,600.
Apollo Tyres: Buy | LTP: Rs 510 | Stop-Loss: Rs 485 | Target: Rs 560 | Return: 10 percent
The stock has undergone an extended consolidation phase and has established a robust support base around the Rs 490 level. The price is sustaining above the Rs 500-505 zone with decent volumes, pointing towards buying interest among short-term traders. Also, a positive crossover is indicated in the MACD (moving average convergence divergence) while RSI stands at the 63 level.
This technical structure suggests that one can initiate a long position at the CMP of Rs 510 for a target price of Rs 560. The stop-loss can be kept at Rs 485.
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