By Rajesh Agarwal AUM Capital
Benchmark indices closed higher for a second straight session on Tuesday helped by gains in banking and power stocks despite losses in global equities amid trade war tensions between US and China. The market breadth was in favour of advances with three stocks advancing against each declining ones.
Sentiments remained under pressure as growth in India’s manufacturing sector slowed again in March as both output and new orders fell to its slowest pace since October. The Nikkei India Manufacturing Purchasing Managers’ Index, or PMI, fell to 51.0 in March from 52.1 in February.
Among sectoral indices, the Nifty PSU Bank index was up over 1.5% led by a rise in the shares of Bank of India and Bank of Baroda.
Technical Outlook
Nifty
Nifty have extended its winning spree for two consecutive days and closed above its major moving averages of 20 EMA & 200 SMA i.e. 10239 & 10186 levels respectively. It is currently trading around Upper Band of Descending Channel whose breakout point is placed at 10,255 levels. Any significant breach above this level may take Index further higher till 10350 marks.
Furthermore, Nifty has given a breakout from an 'Inverse Head & Shoulder' pattern on hourly time frame which is bullish set-up.
Bank Nifty
Nifty Bank outperformed benchmarks led by strong rally in PSU Banks after Reserve Bank of India (RBI) allowed banks to spread its bond trading losses. It has given breakout from a Falling Channel on daily time frame. Index is heading towards its major moving average of 200 SMA which stands around 24860 levels. Now Nifty Bank has to cross this level decisively for further upside.
Moreover, it has given a breakout from a Bullish reversal pattern on shorter time frame. Furthermore, Oscillators are trading in bullish mode.
Below are the top 5 stocks which can give up to 5% returns in the shrt term:
NOCIL Limited | Rating: Buy | Target: Rs 218, stop loss: Rs 196 | Return: 5%
Bhansali Engineering Polymers | Rating: Buy | Target: Rs 198, stop loss: Rs 180 | Return: 5%
The Ramco Cements | Rating: Buy | Target: Rs 767, stop loss: Rs 739 | Return: 2%
Vedanta Limited | Rating: Buy | Target: Rs 291, stop loss: Rs 277 | Return: 3%
Bajaj Electricals Limited | Rating: Buy | Target: Rs 645, stop loss: Rs 598 | Return: 2%
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