Ajit Mishra
Markets manage to gain nearly two percent in the eventful last week. The sentiment was downbeat for the most part of the week, following a sharp rise in crude oil prices after an attack on Saudi’s Aramco oil facilities, floods in many districts of central India and not-so-encouraging macroeconomic data. Mixed global cues added to the worries.
But, the tone completely changed after Finance Minister Nirmala Sitharaman on September 20 announced a sharp cut in the corporate tax and further easing of surcharge on FPIs. The rise was almost vertical across the board and all the sectoral indices, barring IT, posted exceptional gains. Among the benchmark indices, the Nifty posted the biggest single-day gain and reclaimed 11,250.
We expect volatility to remain high this week due to scheduled derivatives expiry on September 26. Besides, global developments, including the US-China trade meet and tension between America the Iran, will further add to the choppiness.
We expect the Nifty to take a breather after the recent surge, but the bias would remain on the positive side.
On the higher side, 11,700-11,800 zone could act as a hurdle, while 11,350-11,500 would provide the needed support in case of any profit-taking.
Though we’re seeing participation from the across the board, expect IT, we feel banking would play a critical role. Traders should focus more on private banks, financial, capital goods and FMCG names, while pharma and IT may continue to trade lacklustre.
Here are three stocks that could give 5-13 percent returns:
Gruh Finance: Buy | Target: 305 | Stoploss: Rs 265 | Return: 9 percent
Gruh posted a fresh breakout from a consolidation range on September 23 and surpassed the hurdle of the long-term moving average (200-EMA) on the daily chart also. Considering the overall chart formation and positioning of confirmation indicators, we expect up move to continue.
We advise accumulating fresh longs in the given range Rs 276-280. It closed at Rs 279.25 on September 23.
InterGlobe Aviation: Buy | Target: Rs 1,900 | Stoploss: Rs 1,750 | Return: 5 percent
IndiGo touched a new high on September 23, after spending nearly a month under consolidation. All indications are in the favour of uptrend to extend further, thus we advise maintaining “buy on dips” approach.
We advise initiating fresh longs in the Rs 1,790-1,810 range.
Manappuram Finance: Buy | Target: Rs 152 | Stoploss: Rs 126 | Return: 13 percent
Manappuram has witnessed a consolidation breakout of late and attracting noticeable buying interest. Existence of strong support zone around 120 levels combined with bullish chart formation is pointing towards strong surge ahead.
Traders are advised to initiate fresh longs in the Rs 132-135 range.
(The author is Vice President Research at Religare Broking.)
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