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Hot Stocks | Why should you invest in Wipro and Astral in the short term?

We expect Wipro to convincingly overcome immediate hurdles, given the positive placement of the ‘RSI-Smoothened’ oscillator. Buy for a target price of Rs 498 in the near term.

Angel One’s Chief Analyst-Technical and Derivatives, Sameet Chavan

Last week’s late recovery in our market seemed to portend some relief on the global front. In line with this, we saw a pleasant environment around the world last Monday, resulting in a gap-up opening in domestic markets to start the week on a positive note. The benchmark index Nifty began the week with a nearly 200-point gain, setting the tone for the rest of the week.

Why should you invest in Wipro and Astral in the short term?
Why should you invest in Wipro and Astral in the short term?

The market, however, failed to maintain the momentum in the following sessions. During the first half of the week, the market struggled around 16,700, which resulted in some stock-specific corrections. Fortunately, on weekly expiry day, 16,400 provided solid support, pulling the markets higher at the close and influencing the positive start last Friday as well. However, following the opening, the market remained jittery throughout the session, eventually closing with minor losses below 16,600.

On a weekly basis, the Nifty may have gained nearly 1%, but when we look at the intra-week activity, we can clearly see that there was no conviction for the majority of the week (especially at the higher end).

From a technical standpoint, the Nifty has finally surpassed the recent strong wall of 16,400; however, it struggled as we approached the next barrier, which is around 16,700 – 16,800. In fact, the way things went down on Friday reflects how traders are wary of carrying positions into the weekend. Because, while we have seen some relief on a global scale, we are still not out of the woods.

For the coming week, keep a close eye on global developments, and 16,400 is the price level to watch out for. We can continue with a ‘buy’ on decline strategy as long as we stay above it. However, the higher end is still capped, with 16,800 serving as an immediate barrier and 17,000 serving as a key psychological level.

Although some of the heavyweight spaces performed well this week, they were unable to improve overall sentiment in the second half. As a result, traders should avoid trading aggressively and should instead be very selective in stock specific trades.

Read Also: Monday’s Trade Setup: The Top 15 Things to Know Before the Opening Bell

Here are two buy recommendations for this week

Buy | LTP: Rs 1,746 | Stop-Loss: Rs 1,683 | Target: Rs 1,870 | Return: 7% Astral: Buy | LTP: Rs 1,746 | Stop-Loss: Rs 1,683 | Target: Rs 1,870

Throughout the month of May, stock prices were under severe pressure, and we saw a massive price correction of more than 25% in such a short period of time. Fortunately, the pounding came to a halt around Rs 1,600, after which prices remained stable for nearly a week.

We saw a massive single-day upsurge in stock prices during the middle of the week, convincingly crossing the ‘5-day EMA’ (exponential moving average). The volumes were large enough to support the price action.

Read Also: Nifty Options Strategy: Short Iron Fly if consolidation continues

Wipro
Wipro

As a result, despite the stock’s cooling in the following two sessions, we recommend buying it for a trading target of Rs 1,870. Rs 1,683 can be used as a stop-loss level.

Buy | LTP: Rs 475.50 | Stop-Loss: Rs 464 | Target: Rs 498 | Return: 5% Wipro: Buy | LTP: Rs 475.50 | Stop-Loss: Rs 464 | Target: Rs 498

The IT sector finally breathed a sigh of relief this week, as it emerged as one of the best performers in the market, helping to pull the market back from its recent lows. In the case of Wipro, the ‘Dragonfly Doji’ pattern from the previous week is being confirmed.

Stock prices are showing early signs of strength on the slightly lower frame chart, as they challenge the ’20-day EMA’ at Rs 478.

We expect the stock to convincingly surpass immediate hurdles, given the positive placement of the ‘RSI-Smoothened’ oscillator. Buy for a target price of Rs 498 in the near term. A strict stop-loss should be set at Rs 464.

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