Investors are advised to stay long as long as the index holds above 10,750-10,700, experts said
The Nifty consolidated throughout the week and closed flat with a slight negative bias for the week-ended July 20. Things are unlikely to change this week as traders will rollover their positions from July series to August series.
Indian markets consolidated amid concerns of a trade war, weak rupee-dollar as well as no-trust vote on Friday, which restricted trading within a 150 points range. Friday’s rally helped the Nifty reclaim 11,000 for the second straight week in a row.
Experts advise investors to stay long as long as the index holds above 10,750-10,700. “Last week’s action does not provide any major cue. If we combine it with the prior week’s developments, we can construe this as a lull before the storm,” said Sameet Chavan, Chief Analyst, Technicals and Derivatives at Angel Broking.
“Hence, we continue with our stance as long as the Nifty remains above 10,750–10700 levels. Till then, any intra-week decline would be a buying opportunity,” he said. Chavan sees the index gearing up for record highs and will not be surprised if it occurs over the next 1-2 weeks.
Here is a list of 10 stock strategies for expiry week that could return 5-28% in the short term:
Analyst: Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in
ACC: Buy| LTP: Rs 1,292.40| Target: Rs 1,397| Stop Loss: Rs 1250| Return 8%
After a multi-month correction, this counter appears to have posted a durable bottom after testing November 2016 lows of Rs 1,256 from where a big uptrend unfolded in this counter.
The last couple of weeks, price action is clearly pointing towards a decent basing formation around Rs 1,260 from the cushion of which it can be expected to register a bigger relief rally.
Hence, positional traders are advised to adopt a two-pronged strategy of buying now and on declines around Rs 1,270 for an initial target of Rs 1,397 with a stop loss of Rs 1,250.
Cholamandalam Finance: Buy| LTP: Rs 1519| Target: Rs 1595| Stop Loss: Rs 1467| Return 5%
This counter appears to be moving in a range of Rs 1,470 – 1,595 which is in line with the market indices and as it tested and bounced back from the lower end of the consolidation range it can be expected to reach the upper band whose value is placed around Rs 1,600 levels.
Hence, positional traders should buy now and on declines between Rs 1,495 - 1490 for a target of Rs 1,595. A stop-loss suggested for the trade is Rs 1,467.
State Bank of India: Buy| LTP: Rs 260.95| Target: Rs 281| Stop Loss: Rs 254| Return 8%
This counter appears to be on the verge of a breakout as it is in a consolidation mode with positive bias after registering a Bullish Engulfing formation on relatively higher volumes couple of days back.
It can face a minor hiccup around Rs 265 but once that hurdle is crossed momentum shall further get strengthened in it.
Hence, positional traders shall buy into this counter with a target of Rs 281 and a stop placed below Rs 254 on a closing basis.
Analyst: Shabbir Kayyumi, Head - Technical & Derivative Research at Narnolia Financial Advisors Ltd
Ashok Leyland: Buy| Buy range: Rs104-Rs 106| Target: Rs 135| Stop Loss: Rs 90| Return 28%
After giving a breakdown below Rs 123 levels, it slipped sharply towards its lower level but parity on the weekly time frame chart can provide a halt to the downtrend in the near-term.
RSI seems to be bottoming out in an oversold zone which raises the possibility of a bounce back on the higher side. Looking at the aforementioned rationale, one can buy this at the levels of Rs 104-106 with a stop loss of Rs 90 and an upside target of Rs 135.
Bank of India: BUY | Buy Range: Rs 81-Rs 83|Target Rs 100| Stop Loss Rs 72| Upside 20%
The weekly chart of Bank of India reveals that it has formed a Dragon Fly Doji which is a trend reversal candlesticks pattern. At the same time, positive divergence in RSI on the weekly chart is also giving the possibility of a pullback on the higher side.
The lower time frame of the chart also gave a breakout through its double bottom pattern which has created a positive rhythm on the upside.
By looking at all these supportive technical factors, one can accumulate this stock around Rs 81-83 with the stop loss of Rs 72 and a target of Rs 90 and Rs 100 levels.
Escorts: BUY | Buy Range: Rs 820- Rs 830|Target Rs 950| Stop Loss Rs 749| Return 15%
After hitting a peak of Rs 1,017, the scrip corrected sharply. Point of polarity creates the opportunity of role reversal near the levels of Rs 820-830 where it can halt its southward movement and give a chance of maintaining the favorable risk-reward ratio.
Oversold RSI and stochastic near the levels of 30 can push the scrip on the higher side. Buying momentum will develop when it surpass above Rs 880 with decent volume after which it will accelerate towards Rs 930 marks.
To justify the support at the lower level, it has to sustain above its 200-DMA which comes around Rs 827 levels.
Kaveri Seed: BUY | Buy Range: Rs 570-Rs 580|Target Rs 630| Stop Loss Rs 530| Return 9%
Kaveri Seed is trading with a higher high and higher low formation which is a sign of a positive trend. Recently, RSI which crossed 50 marks hints at a bullish tone.
At the same time, sustainability above Rs 580 –590 levels can give a spurt towards its unchartered territory near Rs 600 and Rs 630 marks. Its 200-DMA is around Rs 530 and it is trading above all the short-term moving averages which is a sign of strength.
We recommend initiating a long position in KSCL around Rs 570-580 levels by keeping a stop loss at Rs 530 and the upside targets are Rs 600 and Rs 630.
Reliance Industries: BUY | Buy Range: Rs 1110-Rs 1100|Target Rs 1200| Stop Loss Rs 1060| Return 8%
After giving break out from the rising channel which was observed on the weekly chart, RIL took a sharp move on the upside and consolidated near the peaks of Rs 1,100 where it formed a Flag pattern on the daily chart.
Sustainability above Rs 1,100 –1,110 levels can give a spurt towards its unchartered territory near the levels of Rs 1,170 and Rs 1,200 mark.
However, indicator and oscillator are lending its support to its price action. One can go long near the levels of 1100-1110 with the stop loss of Rs 1,060 for the target of Rs 1,170 and Rs 1,200 mark.
(Note: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.)
Analyst: Sameet Chavan, Chief Analyst, Technicals, and Derivatives at Angel Broking
IGL: Buy| LTP: Rs 278.65| Target: Rs 313| Stop Loss: Rs 260.50| Return 12%
After enjoying its multi-year Bull Run, the stock prices slipped into a corrective mode. Fortunately, the price wise correction was not as sharp as its previous years’ rally.
We witnessed a gradual decline in the last six months and due to this, we can see a formation of ‘Falling Wedge’ on the weekly chart.
The said pattern has now been broken out along with higher than average volumes. One can look to go long for a positional target of Rs.313 in coming weeks. The stop loss needs to be fixed at Rs.260.50.
Vedanta: Buy| LTP: 202.40| Target: Rs 219| Stop Loss: Rs 198| Return 8%
The entire metal pack remained in extreme distress over the last five months. We went with our contradictory bearish stance on this sector towards the fag end of the January when it was making multi-year highs.
Now, after a massive correction, we again want to have a slightly contradictory approach, as we expect limited downside from here on. At present, we are closely tracking ‘Vedanta’ which we believe is due for a decent relief move in the midst of some negativity.
Technically speaking, the stock prices have reached May 2017 lows and we are seeing a positive divergence in ‘RSI-Smoothened’ on the weekly chart.
Hence, we will not be surprised to see a decent bounce back in this stock. More importantly, it offers a low-risk trade and thus, we recommend for a near-term target of Rs.219. However, the stop loss of Rs.198 should be followed on a closing basis.Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.