Chart: Nifty bulls are here, banks safest bet

Special to Firstpost

CNX Nifty (6,187.3): The week gone by was quite an eventful one for the stock market. After a big crack on Monday, the index recovered sharply on Wednesday and moved on to close at 28-month high. As observed last week, the short-term trend remains bullish and appears on course to hit the target of 6,220-6,240 range.

Those holding long positions in the Nifty may have a trailing stop loss at 5,940, basis the spot price. The positive view would be in force as long as the index trades above the minor swing low at 5,970.

Aggressive traders may consider long positions on weakness, with a stop loss at 5,940 and target of 6,220. Stocks such as TCS, Bata India, Raymond, Century Textiles and United Spirits come across as top picks from a long-term portfolio perspective.

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[caption id=“attachment_794171” align=“alignleft” width=“380”] The rally in the Nifty was driven by the strong trend in the bank index[/caption]

Bank Index (13,317.10): The rally in the Nifty was driven by the strong trend in the bank index. Led by State Bank of India, a host of public sector banks ended in the gainers list this week. The private sector banks too joined the party and managed to settle at higher levels.

The index moved past the bullish trigger level of the 13,100 mark which is a major sign of strength. The index could now rally to the next target-cum-resistance level of 13,750. Long term investors may use any weakness to buy fundamentally sound stocks from the banking space. A fall below the recent swing low at 12,188 would indicate reversal of the bullish view.

TCS (Rs.1,458): After a sharp rally off the April 30 low of Rs 1,364, the stock has been in a minor corrective phase in the past few trading sessions. The short-term outlook is bullish and the stock could rally to the immediate resistance at Rs.1,610.

Investors may buy the stock on weakness, with a stop loss at Rs 1,345, for a target of Rs.1,610 to begin with. The uptrend would gain momentum on a breakout past Rs.1,610 and the stock could then rally to the major target of Rs 1,720.

Larsen & Toubro (Rs.1,623.05): The stock has been in a steady uptrend since April 30. The chart patterns indicate that the stock is in the midst of a medium-term uptrend and could test the resistance at Rs 1,780.

[caption id=“attachment_794151” align=“alignleft” width=“600”] Traders may consider long positions with a stop loss at Rs 1,470, for a target of Rs 1,780.[/caption]

Traders may consider long positions with a stop loss at Rs 1,470, for a target of Rs 1,780. Those endowed with greater dosage of patience may get exit opportunities at Rs 1,885.