Moneycontrol
Nov 09, 2017 08:38 AM IST | Source: Moneycontrol.com

Strength will continue if Nifty sustains above 10,400; 4 stocks which could give up to 13% return

We recommend positional traders to hold on to their position with keeping stoploss level below 10,250 on closing basis and rallies should be used to exit long positions. The Nifty50 will continue with its overall uptrend if it manages to sustain above 10,400 level.

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Rohit Singre

Bonanza Portfolio

The Nifty50 corrected 100 points from fresh highs in the last two days and we witnessed strong volumes on the charts. In Tuesday session, long unwinding was seen in the index and on Wednesday we saw a short built up in index suggesting bulls are losing control on the street and bears entering from higher levels.

The index managed to close above 10,300-mark in Wednesday’s session. A strong support is placed at 10,250 and holding above the same level, we expect the rally to continue towards 10,355-10,400 in coming sessions.

In the short term time frame, the index is trading in an oversold zone, we may expect a bounce but overall strength will come only if Nifty sustains above 10,400 level.

On the derivative front, highest open interest is at 10,000 PE followed by 10,200 PE which will act as strong support for November and on higher side 10,500 CE have highest open interest followed 10,400 CE so will act as resistance as of now.

We recommend positional traders to hold on to their position with keeping stoploss level below 10,250 on closing basis and rallies should be used to exit long positions. The Nifty50 will continue with its overall uptrend if it manages to sustain above 10,400 level.

Here is a list of four stocks which can give up to 13% return in short term:

Crompton Greaves: BUY | Target Rs 260 | Stop Loss Rs 210| Upside 13%

The stock rallied from 137 to 245 levels in the span of three months and from there it retraced back to its 38.20% level. A strong support of 200-DMA and 38.2% retracement zone acted as a strong base for the stock as we witnessed a strong pullback in the stock.

On daily charts, the stock broke its triangle pattern recently with decent volume and on the weekly charts, the stock has broken its consolidation area. The momentum indicator such as relative strength index (RSI) which is hovering near 60 is again in a bullish zone.

Traders can take a position at the counter at current levels to any dip near 220 for the targets of 260 and a stop out levels can be kept below 210 on the closing basis.

3M India: BUY | Target Rs 17500| Stop Loss Rs 14000| Upside 12%

The stock is trading in a super uptrend since long and if we look at the last week chart setup, we have witnessed a strong Cup and handle pattern breakout on the weekly charts in the presence of good volume that suggest the stock is all set to go further higher from current levels.

If we look at the monthly charts, it seems that the stock has broken its bullish flag pattern and an inverted head and shoulder pattern, which are both bullish in nature.

Considering technical setup, traders can accumulate the stock at current levels to any dip near 14800 for the target of 17500 with a stop loss below Rs 14000 on a closing basis.

Brigade Enterprises: BUY | Target Rs 310| Stop Loss Rs 260| Upside 10%

The stock was in a consolidation period for the last three month and just last week, the stock has given a volume breakout.

On the daily charts, the stock has broken from its inverted head and shoulder pattern with strong volumes and currently, the prices are hovering above breakout zone.

On the weekly charts, the stock has broken from its bullish flag pattern which is considered being a bullish continuation pattern.

Considering technical breakouts, traders can initiate buy call on the stock at current levels to any dip near 275 for the target of Rs 310 with a stop loss below Rs 260 on a closing basis.

TTK Prestige: BUY | Target Rs 7000| Stop Loss Rs 6300| Upside 6%

The stock is trading in a strong uptrend since long and in the last two month, we saw some correction in the counter which dragged the stock towards 6k levels.

On the weekly charts, stock took a support at its 50-days exponential moving average and we have seen a strong pull back with volume recently.

If we study the weekly chart, the stock has broken from its bullish flag pattern and small downtrend channel pattern recently with very good volumes suggesting it is ready to continue its overall trend.

Considering above technical evidence, Bonanza recommends a buy call on stock at current levels to any dip near 6400 for the target 7000 with keeping stop out level below 6300 on a closing basis.

Disclaimer: The author is Senior Research Analyst, Bonanza Portfolio Ltd. The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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