shrewd: ETMarkets Smart Talk: Nifty May Hit New High This Month, Says Kunal Shah, LKP Securities

The formation of a base over the past two weeks at Nifty suggests a new near-term high. The expectation can be maintained next week or at most by the end of the November series, says Kunal Shah, senior technical and derivatives analyst at . He recommends buying , and L&T this week:

Edited excerpts from a chat:

After the good performances of the week, what are the levels you would aim for on Nifty and Nifty Bank?
The bulls defended support at the lower end of both indices, and the index rallied strongly in the final hour of trading. If the Nifty Index once breaks above 18,200, we will see a short cover towards the 18,500-18,700 levels. If Nifty Bank once breaks above 41,500, we will see a short cover towards 43,000 levels. Momentum oscillators are in the strong buy zone, confirming internal strength

Is there a chance that Nifty will hit a record high this week?
The type of base formation that has been occurring over the past two weeks suggests a new near-term high. The expectation can be maintained next week or at most, by the end of November series.

Mazagon Dock is an action that has rallied non-stop. Do you see it in the oversold zone now?
The stock has been on a strong move for the past few months and now looks a bit exhausted and may post some profits from current levels. The Momentum RSI oscillator has entered a strong 90 overbought territory, indicating that the stock may see some exhaustion from current levels.

After Friday’s strong 6.5% rise, what does the chart look like for the week ahead?
The stock, after a slew of stupendous numbers, saw a strong rally higher with new longs built on the F&O data. The stock is trading just off its 52-week high, indicating strength. It forms higher and lower formations indicating that the uptrend is intact.

What are the 3-4 titles that would be above your radar for the week?

Buy RIL, Stop loss: Rs 2,500, Target price: Rs 2,800/3,000

On the weekly charts, the stock gave a breakout from a falling trend line with a strong increase in volumes. The RSI momentum indicator also shows a new break of the downtrend line and enters the 60 area, confirming the strong breakout. Low-end support is placed at Rs 2,500 and visible targets on the upside are Rs 2,800/3,000.

Buy Canara Bank. Stop loss: Rs 283, Target price: Rs 330
On the weekly chart, the stock price held above previous consolidation, suggesting rising optimism. The price found support at the 50-EMA on the weekly chart before moving higher. The momentum indicator is in a bullish cross on the weekly chart. In the short term, the trend should remain positive. At the high end, the stock could move towards Rs 330 in the near term. At the lower end, support is visible at Rs 284.

Buy L&T. Stop loss: Rs 1,900. Target price: Rs 2,150-2,200
L&T showed strong strength in a sideways market where it formed a higher and lower formation on the daily chart. The RSI momentum oscillator is trading above 60, confirming internal strength. The momentum is expected to continue on the upside and the stock is expected to surpass its 52-week high of Rs 2,080.

Carol N. Valencia