Achin Goel
The Nifty started off Thursday on a positive note and remained volatile throughout the session. On the daily chart, it formed a Tweezers Bottom, which indicates that the weakness couldn’t pull the index below Wednesday’s low.
At the higher end, the Nifty faced resistance at its 50-day exponential moving average (EMA) and settled a bit lower. The trend is expected to remain sideward to negative as long as the price sustains below the 50-EMA, which is currently pegged at 10,551.
Bearish crossover in the momentum oscillator, relative strength index (14), is suggesting further near-term weakness in the index. No divergence in the indicator suggests a continuation of the current bearish momentum. The trend following indicator such as the moving average divergence convergence (MACD) is in a bearish crossover and has fallen below the signal line.
Weakness in the market may continue for the next few days. At the lower end, the index may correct towards 10,325. On the other hand, a short-term pullback may be seen in the market if the Nifty moves decisively above 10,560 levels.
Here is a list of top five stocks that could return up to 11% in the next 30 days:
UPL: Buy | Target: Rs 771 | Stop Loss: Rs 659 | Return: 11%
The stock has been trading within a downward sloping channel; however, the price seems to have now reached the lower band of the falling channel which may induce pullback over the short term.
In addition, the price has made a double bottom at Rs 672 which is expected to act as support for the falling price.
Positive divergence is visible in the momentum indicator RSI (14) on the daily chart. Traders can accumulate the stock in the range of Rs 690-700 for the target of Rs 771 with a stop loss below Rs 659.
Tata Elxsi: Buy | Target: Rs 1,350 | Stop loss: Rs 1,129 | Return: 12%
The stock price has moved above the range-bound pattern on the daily chart which suggests a change in the trend. In addition, the price has moved above 20-days moving average (DMA).
The momentum indicator, RSI (14) on the weekly frame is in a bullish crossover with a current reading at 57.76; whereas, weekly MACD is in the positive crossover.
Traders can accumulate the stock in the range of Rs 1,190-1,200 for the target of Rs 1,350 and a stop loss placed below Rs 1,129.
Ashok Leyland: Buy | Target: Rs 161 | Stop loss: Rs 134 | Return: 12%
Price has shown a sign of reversal after a steep correction. On the lower end, the price has found support above 61.8 percent of the previous rise from Rs 105.95 to Rs 167.50.
In addition, correction is seen to have halted around the previous peak on the weekly chart and then moved up. The momentum oscillator, RSI (14) has come out from the oversold zone.
Traders can accumulate the stock in the range of Rs 140-145 for the target of Rs 161 and a stop loss below Rs 134.
Sun Pharmaceutical Industries: Buy | Target: Rs 520 | Stop loss: Rs 429 | Return: 12%
On the daily chart, a bullish Harami pattern has formed, which was then followed by a rise in the price, suggesting a bullish reversal in the days to come.
In addition, the double bottom formation is visible at Rs 432 on the daily chart, which suggests falling price may find support at Rs 432.
If the stocks slip below Rs 432 then it may see a bigger correction. The daily RSI (14) is seen coming out of the oversold zone. Traders can accumulate the stock in the range of Rs 455-465 for the target of Rs 520 and a stop loss below Rs 429.
Godrej Consumer Products: Buy | Target: Rs 1,255 | Stop loss: Rs 1,048 | Return: 12%
On the weekly chart, the stock has given a breakout from its range-bound pattern, which suggests a change in the previous sideward trend.
In the recent move, the price moved above its 50-days moving average (DMA) on the daily chart. In addition, the price has also moved above 50 percent of the previous fall from Rs 1,156 to Rs 1,064.
Moreover, the momentum indicator, RSI (14) is in a bullish crossover and rising. Daily MACD has entered in the positive crossover. Traders can accumulate the stock in the range of Rs 1,105-1,120 for the target of Rs 1,255 and a stop loss below Rs 1,048.
Disclaimer: The author is Head of Wealth Management and Financial Planning, Bonanza Portfolio Ltd. 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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