Moneycontrol
Get App
Last Updated : Apr 17, 2019 11:50 AM IST | Source: Moneycontrol.com

Auto, metal stocks look strong, create longs with proper stop loss: HDFC Securities

The primary trend of the Nifty is still bullish. The Nifty could extend the rally towards the target of 12,000.

Moneycontrol Contributor @moneycontrolcom
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Vinay Rajani

For the last 10 trading sessions, Nifty was consolidating in the range of 11,550 to 11,760, and finally, on April 16 the index broke out of the range to hit a fresh record high.

Nifty formed a double bottom at 11,550 odd levels during the week and that should be utilised as a stop loss in trading long positions.

The next target for Nifty once the index closes above 11,760 (which it did on April 16) is 12,000. For the week ended April 5, Nifty formed “Doji” candlestick on the weekly charts after prolonged uptrend from 10,585 to 11,761.

From the sectors, auto and metal indices look strong on the short-term charts. Largecap stocks from these sectors can be traded long with appropriate stop loss.

The primary trend of the Nifty is still bullish. Nifty could extend the rally towards the target of 12,000. Irrespective of index trend, sectors-specific move is expected to be there on the bullish side. Auto and metal stocks should be on the radar for creating longs.

Here is a list of top three stocks which could give 6-13% return in the next month:

Just Dial: Buy| LTP: Rs 599| Target Rs. 680|Stop-Loss: Rs 570| Return 13%

The stock price has retraced 50 percent of the entire upswing seen from Rs 464 to Rs 677 seen from 20th Feb to 18th Mar 2019.

During the correction from Rs 677 to Rs 570 volumes were very low, while during the upswing of Rs 464 to Rs 677 volumes were significant.

Golden crossover is observed on the charts, as 50 DMA has surpassed 200 DMA, indicating long term bullish trend reversal.

In the month of March stock surged more than 16 percent after breaking out from long term downward sloping trend line on the weekly charts.

Considering the technical evidence discussed above, we recommend buying the stock at CMP and average it at Rs 585, for the target of Rs 680, keeping a stop loss at Rs 570 on closing basis.

TVS Motor: Buy| LTP: Rs 516| Target Rs 549| Stop-loss Rs 480 | Return 6%

Multiple trend line breakout is seen on the daily charts. The stock has been forming higher tops and higher bottoms. It has surpassed the crucial resistance of 55 days EMA. Indicators and oscillators have been showing strength on the short term charts.

Considering the technical evidence discussed above, we recommend buying the stock between for the target of Rs 549, and keep a stop loss at Rs 480 on a closing basis.

SAIL: Buy| LTP: Rs 58.60| Target: Rs 65| Stop-Loss: Rs 55| Return 11%

We saw a bullish inverse head and shoulder breakout on the daily charts. The stock price had surpassed the resistance of 50 and 100 days-EMA.

It has resumed its uptrend after witnessing running correction. The Nifty Metal Index has given a “Flag” pattern on the daily charts.

MACD Indicator has been showing strength on the daily charts. ADX Indicator has crossed over –DI line on the daily charts, indicating fresh momentum buying.

Considering the technical evidence discussed above, we recommend buying the stock for the target of Rs 65, and keep a stop loss at Rs 55 on a closing basis.

(The author is Technical and Derivative Analyst at HDFC Securities)

Disclaimer: The views and investment tips expressed by investment expert 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.
First Published on Apr 17, 2019 11:50 am
More From
Loading...
Sections
Follow us on
Available On
PCI DSS Compliant