The Nifty has continued its journey north and managed to zoom past the crucial psychological mark of 15,000. Flat bottom green Heikin-Ashi candles on a daily and weekly time frame indicate that the positive price action will move further
Continuation of the bullish crossover of 20 and 50 DMAs on the daily and the weekly time frame and sustainability above 5 DMA and 10 DMA suggests that prices can trade higher towards targets of the cup and handle classical pattern. The upper trendline of the Andrew pitchfork is also standing near the 15,500-mark, which indicates that the Nifty is headed towards 15,500. Labeling this rally with Elliott Wave count suggests that the recent up move is the typical behaviour of impulse extended wave III.
The crucial support zone stands near 14,500-14,700. Trend reversal and stop-loss level for the positional trader is 14,500 as that is the low of previous swing and also the level where five-week simple moving average stands.
The Bank Nifty gave exponential up move in the last week and managed to close above life high levels. As long as the banking index is trading above 5- DMA it can continue its upside journey. Nevertheless, the trading range for the banking index will be 34,000 on the lower side and 38,000 on the higher side for the coming week.
Here is the list of three stock recommendations that can return 11-16 percent in the short term:
Canara Bank: Buy Around Rs 155 | Target: Rs 180 | Stop Loss: Rs 142 | Upside: 16 percent
On the daily and weekly charts, the stock is showing a retest of the neckline of its earlier reversal formation, which is broadly positive. The incremental volume activity post-breakout formation indicates further bounce back from the neckline. The stock is trading well above short-term as well as medium-term averages, which means that an uptrend wave is likely to continue in the near term. One can buy this stock at around Rs 155 for the target of Rs 180 with a stop loss of Rs 142.
Cadila Healthcare: Buy around Rs 465 | Target: Rs 530 | Stop Loss: Rs 445 | Upside: 12 percent
The stock is expected to give a Flag breakout on the hourly chart with decent volume. The bullish crossover in Stochastic and MACD are looking supportive for this upside breakout. Positive crossover of 20 and 50 DMAs indicates strength. Key support lies at Rs 450-445. Until this breaks decisively, long position can be held. Investors can take entry around Rs 465 with a stoploss of Rs 445 on a closing basis for the target of Rs 530 and Rs 545 levels.
Hindustan Unilever: Buy Around Rs 2,240 | Target: Rs 2,500 | Stop Loss: Rs 2,150 | Upside: 11 percent
The counter is bottoming out with a bullish reversal formation and above Rs 2,285 level, it is likely to rally towards Rs 2,500. The stock is trading above its 100 and 200-day moving averages where the previous breakout point of Rs 2,150 will act as strong support. Momentum indicators are positive on both daily and weekly charts, hence we recommend buying the stock at around Rs 2,250 with a target of Rs 2,500 with a stop loss at Rs 2,150.Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.