Moneycontrol
Dec 07, 2017 08:31 AM IST | Source: Moneycontrol.com

Sell on rallies as Nifty remains weak; 4 stocks which could give up to 16% return

The overall structure is negative at the moment, and we may see some bounce back in the index as it is trading in an oversold zone on intraday charts.

Moneycontrol News @moneycontrolcom
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Rohit Singre

Bonanza Portfolio

In the Wednesday’s session, the index closed below its strong support placed around 10,070, with a loss of 74 points. After touching 10,400 levels in late November, the index declined continuously for the sixth consecutive session.

Technically speaking, the index has broken its double top pattern below 10,090 levels which is negative in nature and may drag index towards 9,700 levels in the short term.

In the Wednesday’s session, the index has broken its 100-DMA with good volumes hinting negative structure in the index for near term.

On the other hand, immediate resistance for the Nifty is coming near 10,200 levels and if the index managed to break and hold above 10,200 levels then we may see some trend reversal in the index.

On the derivative front, highest open interest still at 10,000 PE which will act as strong support again and on higher side 10,500 CE has highest open interest followed by 10,400-10,300.

The overall structure is negative at the moment, and we may see some bounce back in the index as it is trading in an oversold zone on intraday charts.

We recommend investors to use every rise as selling opportunity in the index with keeping an overall stop loss at 10,200 levels and we may initiate buy call only above 10,200 levels. We also recommend keeping more of stock-specific approach.

Here is a list of four stocks which can give up to 16% return in short term:

ZEE Entertainment Enterprises: BUY | Target Rs 600-620 | Stop Loss Rs 540| Upside 9%

The stock broke from its eight-month consolidation in late November and reacted quickly, but it failed to give a closing above its 52-week high, as a result, it corrected towards the previous breakout.

Recent correction got over near its previous breakout level and the stock started to move higher again. We expect the stock to hold above Rs540 level and could even move towards Rs600-620 levels immediately.

The momentum traders can initiate a long call on the stock at current levels to any dip near Rs555 for the target of Rs600-620 with a stop loss below Rs540 on a closing basis.

Kesoram Industries: BUY | Target Rs 161-172 | Stop Loss Rs 136| Upside 16%

The stock started its short-term downtrend in the month of April and in the current week, we have seen a strong price and volume breakout on the weekly charts.

The stock has broken its strong resistance of Rs150 with strong volumes and can be considered as a triple bottom breakout. The stock is trading above all its strong DMA’s such as 200, 100, 50-Days moving average (DMA) on mid to long-term charts which is a mark of strength.

Traders can take a position in the counter at current levels to any dip near Rs142 for the targets of Rs161 and Rs172. The stop loss levels can be kept below Rs136 on a closing basis.

Nilkamal: BUY | Target Rs 1900-2050| Stop Loss Rs 1625| Upside 15%

The stock rallied from Rs1260 to 2270 at the start of the year but then it soon corrected to make a low of Rs1480. The stock found some stability at 78.6% retracement level from its previous low at Rs1230 and started moving northwards.

The stock has given a range breakout of last four month on the daily chart with strong volumes and in the Wednesday’s session, it rallied nearly 7 percent after taking support on the previous breakout.

The recent price momentum suggests that the momentum is still intact and the stock can move towards Rs1900-2050 levels in the near term.

Considering technical setup, traders can accumulate the stock at current levels to any dip near Rs1700 for the targets of Rs1900 and Rs2050 with a stop loss below Rs 1625 on a closing basis.

Godrej Consumer Product: BUY | Target Rs 1080| Stop Loss Rs 950| Upside 8%

The stock was trading in the range of Rs900 to 1000 since last four months and on Wednesday session, the stock has broken the range and gave a closing above Rs1000 levels which suggest that the stock can move near previous high in near to midterm.

On weekly chart, stock maintained its overall uptrend though benchmark has corrected nearly 3 percent in the last two weeks.

We expect the current momentum in the stock to extend further. The momentum indicators such as RSI is currently reading above 60 on the daily and weekly charts which is again a bullish zone.

Considering technical structure, traders can initiate buy call on the stock at current levels to any dip near Rs990 for the target of Rs1080 with a stop loss below Rs950 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.
Sections
Follow us on
Available On