Considering the overall chart structure, we are expecting the index to inch higher towards a new life high. Now it has to hold above 17500 zones, for an up move towards 18000 and 18400-18600 zones.

By Rahul Shah

Markets cheered the New Year as equity benchmarks logged the best week in four months to start 2022 led the rally with the Nifty Bank, NBFC, and Nifty PSU Bank. Strong quarterly earning updates by corporates, hopes of good quarterly results, and FIIs switching to net buyers are some signs that are pumping in optimism into the market. Sensex added 1491 points or 2.5% to close at 59,744 while the NSE Nifty 50 index closed 351 points or 2% higher at 17,812. 

However, global markets are not yet participating in the rally as Nasdaq Nosedived 5% (775 points) and Asian markets fell 2-3% after the U.S. Federal Reserve indicated it could potentially move to tighten monetary policy faster if inflation remains elevated. US 10-Year bond spiked to 1.78% over a 1-year high. 

All the eyes are on the corporate earnings for the December quarter. Technology companies will set the ball rolling with TCS, Infosys, HCL Tech, and Wipro taking the lead. Moreover, FIIs trend, US Fed any remarks on the policy-related issue, US Bond Yield trend and progress of covid cases will be focus this week. For market participants, positive macroeconomic numbers, expectations of good quarterly earnings, and inflows from FIIs are proving to be a shot in the arm. The uptrend strength remains intact and is unlikely to see any sharp trended decline from here. Any weakness from here could be a buying opportunity Index has been trading with higher high & higher low formation on a weekly chart as well as formed open marubozu candlestick which suggests an upside rally in the counter.

Considering the overall chart structure, we are expecting the index to inch higher towards a new life high. Now it has to hold above 17500 zones, for an up move towards 18000 and 18400-18600 zones whereas support shifts higher to 17350 and 17200 zones. Happy Trading

SL: Rs 770 | Target: Rs  840

ICICI Bank has given a trend line breakout and has started the next leg on the upside. It is also trading well above its 50 EMA which indicates that uptrend to continue. It has formed a bullish candle on weekly scale by crossing its falling trend line indicating buying interest. RSI oscillator is moving northward on weekly scale and thus showing further strength in the counter. Considering the current chart structure, we advise buying the stock for an up move towards 840 with stop-loss of 770.

Asian Paints
SL: Rs 3510 | Target: Rs 3750

Asian Paints has been moving higher with strong momentum on the weekly and monthly charts. It is trading near its lifetime high territory and has given a breakout of the supply trend line on the daily scale indicating buying strength. RSI oscillator is positively placed which will support the move towards the higher levels. Looking at the overall price structure, we are expecting the stock to inch higher towards 3750 zones Hence, we advise buying the stock with stoploss of 3510.

(Rahul Shah is a Senior Vice President at Group Advisory Leader-PCG, Broking & Distribution at Motilal Oswal Financial Servcies. Views expressed are the author’s own. Please consult your financial advisor before investing.)

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