Abhishek Mondal
The NSE equity benchmark Nifty50 continued its positive momentum and ended in green for the ninth consecutive trading session. The index continued to trade above 10,500, took some support on the back of forecast of normal monsoon for the year 2018-19, which will be a positive boost for the rural economy.
On Tuesday, after a gap-up opening, markets largely remained range-bound for the most part of the day, but managed to close with a modest gain of 0.19 percent at 10,548.70; forming a 'Hanging Man' kind of pattern on the daily scale on Tuesday.
If the Nifty50 manages to hold and sustain above 10,561-mark (50 percent retracement of January to March downfall) in the next few trading sessions, it can move higher till the resistance levels of 10,632 and then till 10,705 levels (61.8 percent retracement of January to March correction).
The immediate support is seen around 10,451 (100DMA) and 10,400 levels. According to daily Pivot charts, the key support level is placed at 10,509, followed by 10,470. If the index starts moving upwards, key resistance levels to watch out for are 10,574 and 10,600.
The Relative Strength Index – RSI on the Daily Chart is at 62.61; showing an upward momentum and MACD just entering above the zero line with positive crossover, which indicates that the bias could remain bullish for the next few trading sessions.
On the Options front, maximum Call open interest of 46.74 lakh contracts is seen at strike price 10,700, followed by 10,500 which now holds 39.40 lakh contracts and maximum Put open interest of 53.42 lakh contracts is seen at strike price 10,400, followed by 10,300 which now holds 49.80 lakh contracts.
As per the options data, immediate support is placed around 10,400 levels, whereas 10,700 will act as a stiff resistance in April expiry.
The India VIX ends down by 1.53 percent at 14.04 and is now trading around the crucial levels of 14. This cooling down of VIX indicates a positive signal for nifty to inch upwards in upcoming trading sessions.
Here is a list of top 5 trading ideas which can give up to 14% return in the short term:
NOCIL Ltd: BUY | Close: Rs 226.50 | Target: Rs 259 | Stop loss: Rs 209 | Return: 14.35%
On the weekly chart, the stock has given a breakout of its upper band of Symmetrical Triangle formation with higher volumes. The weekly Relative strength index (RSI) is showing an upward momentum and MACD is continuously trading above zero line with positive crossover whereas +DI is continuously trading above –DI.
Based on the above-mentioned observations positional traders can buy the stock in the range of Rs 224-227 with a stop loss below Rs 209 (closing) for the target of Rs 259.
Tata Global Beverage: BUY | Close: Rs 280.95 | Target: Rs 320 | Stop loss: Rs 259 | Return: 13.90%
The stock has given a consolidation breakout above Rs 279-280 levels on the daily scale with moderate volumes.
The Daily Relative Strength Index (RSI) is showing an upward momentum and the MACD is trading with positive crossover whereas +DI is continuously trading above –DI, which indicates that the stock has the potential to move higher from current level.
Traders can buy the stock in the range of Rs 278-281 with a stop loss below Rs 259 (closing) for the target of Rs 320.
Bajaj Auto Ltd: BUY | Close: Rs 2864.20 | Target: Rs 3030 | Stop loss: Rs 2770 | Return: 5.79%
The stock has given a consolidation breakout above Rs 2827-2830 level on the daily scale with higher volumes. The Daily Relative Strength Index (RSI) is making a higher bottom and higher top. MACD is trading with a positive crossover below the zero line and stochastic indicator gives positive divergence.
Based on these observations, positional traders can buy around current level and add on dips around Rs 2845-2850 with a stop loss below Rs 2770 (closing) for a target of Rs 3030.
Asian Paints Ltd: BUY | Close: Rs 1176 | Target: Rs 1236 | Stop loss: Rs 1138 | Return: 5.1%
In weekly scale, the stock has given a breakout from descending channel pattern above Rs 1169-1170 levels on Monday.
The Weekly Relative strength index (RSI) is showing an upward momentum and MACD is trading with a positive crossover but still sustaining below zero line whereas +DI continuously is trading above –DI.
Traders can buy the stock in the range of Rs 1270-1276 with a stop loss below Rs 1138 (closing) for a target of Rs 1236.
Divi's Laboratories Ltd: BUY | Close: 1180.55 | Target: Rs 1260 | Stop loss: Rs 1130 | Return: 6.73%
The stock has given a breakout from ascending triangle pattern above Rs 1142-1143 levels on Monday with moderate volumes in the weekly scale.
The Weekly Relative strength index (RSI) and OBV — On Balance Volume, are showing an upward momentum and the MACD is continuously trading above zero line with a positive crossover which indicates that the stock has the potential to move higher.
Traders can buy around current level, accumulate on dips around Rs 1160-1165 with a stop loss below Rs 1130 (closing) for the target of Rs 1260.
Disclaimer: The author is Research Analyst, Guiness Securities. The views and investment tips expressed by investment experts 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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