The index witnessed a steady rise in the first three days of last week but saw profit taking at higher levels in the last two days which pushed Sensex below 37,000 and Nifty below 11,000 levels.
However, for the week, both Sensex and Nifty closed with minor gains. One crucial takeaway from last week was that Nifty50 failed to hold on to 11,000 levels for long.
The Nifty index witnessed lower rolls from January to February series and it has seen addition of around 20 percent in the last six-seven trading sessions of this series with a long attraction which indicates that some upward bias is getting built but intact Call open interest (OI) at the higher strike is restricting its upside momentum, suggest experts.
“Nifty formed a Doji candle followed by a Bearish candle on a daily scale which suggests a short term pause in positive momentum as it failed to hold its gains even after its consolidation breakout above 10,985 zones,” Chandan Taparia, Associate Vice President, Analyst-Derivatives, Motilal Oswal Financial Services told Moneycontrol.
“Now, it has to again cross and hold above 10,985 zones to witness an up move towards 11,080 then 11,176 zones while on the downside a hold below 10,929 could drag the index towards next support at 10,820 then 10,777 zones,” he said.
On the options front, maximum Put OI congestion is seen at 10,700, 10,400 and 11,000 strikes which are having the same kind of outstanding OI inventories while maximum Call OI is at 11,000 followed by 11,200 strikes.
Put unwinding is seen at all the immediate strikes while Call writing is seen at 11,000 to 11,200 strikes. Option band signifies a slight lower shift in the trading range in between 10,800 to 11,100 zones.
Here is a list of top 10 short-term trading ideas by experts which could give 3-12% return in the next 1 month:
Analyst: Dinesh Rohira, CEO and Founder, 5nance.com
Manappuram Finance: Buy| LTP: Rs 104.65| Target: Rs 110| Stop Loss: Rs 90| Upside: 6%
Manappuram Finance remained on an upward trajectory for the last six trading sessions with marginal dip on a single period, but in preceding sessions, it managed to breakout from its long-term resistance of 200-day moving average placed at Rs 94.26 levels which now remains a strong support zone.
The scrip initially remained in a consolidation phase where it hit a low of Rs 65 and a high of Rs 110 on its six-month price chart. It reversed the trend and made a high of Rs 99 odd levels but witnessed a dip towards Rs 90 levels.
Post this consolidation, the scrip has remained in a positive trajectory to form a long bullish candlestick pattern on the weekly price chart led by volume growth indicating a buying regime.
The momentum indicator outlined a positive divergence in price with weekly RSI at Rs 61 levels, coupled with MACD managing to make a bullish crossover in the same period to trade above its Signal-Line.
Analyst: Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in
Bharti Infratel: Buy| LTP: Rs 324| Target: Rs 362| Stop Loss: Rs 290| Upside: 11%
The trend in this counter may be changing in favor of bulls after a prolonged downtrend as this counter resumed its upmove on high volumes after a brief pause around its 200-days moving average.
The scrip seems to have started its own uptrend irrespective of market conditions. It may remain as an outperformer going forward at least in the near-term.
Considering the fact it has swiftly moved from the lows of Rs 286 in just 3 trading sessions positional traders are advised to adopt a two-pronged strategy of buying now and on declines between Rs 310-305 levels and look for an initial target of Rs 362. A stop suggested for the trade is close below Rs 290.
Sonata Software: Buy| LTP: Rs 333| Target: Rs 365| Stop Loss: Rs 323| Upside: 10%
This counter appears to be forming a decent base around Rs 300 levels for the last couple of weeks. As the entire sector is doing well sooner than later it should also breakout from this consolidation phase, which will be confirmed on a close above Rs 344, and rally towards much higher levels.
Hence, in anticipation of such a breakout positional traders are advised to go long and look for an initial target of Rs 365 levels. A stop suggested for this trade is below Rs 323 on a closing basis.
Bharat Petroleum Corp: Buy | LTP: Rs 337.60 | Target: Rs 360| Stop Loss: Rs 334| Upside: 7%
Price behavior of this counter is looking quite interesting as it is moving in an extremely narrow range for the last 5 trading sessions and almost closing around Rs 338 levels all these 5 days.
Hence, on a bounce from current levels, it can easily test its interim top of Rs 360. As the risk-reward ratios look favorable positional traders are advised to buy into this counter with a stop below Rs 334 on a closing basis and look for a target of Rs 360.
Analyst: Sameet Chavan, Chief Analyst- Technical & Derivatives, Angel Broking
Bajaj Finance: Buy | LTP: Rs 2,702 | Target: Rs 2,898 | Stop Loss: Rs 2,620| Upside: 7%
This stock has seen a gradual recovery in the last three months after undergoing a massive price correction in the month of September.
The last couple of weeks has been good for this stock and in this course of action; the stock went on to confirm a breakout from its recent congestion zone around Rs 2,650.
In addition, the ‘RSI-Smoothened’ on the daily chart has surpassed the threshold level of 70, which bodes well for the bulls. We recommend going long for a positional target of Rs 2,898 in the coming days. The stop loss can be placed at Rs 2,620.
Wockhardt: Buy| LTP: Rs 415.15| Target: Rs 468| Stop Loss: Rs 395.80| Upside: 12%
It may sound an extremely contradictory call but looking at recent developments, we are inclined to do so. Due to recent sharp selloff, the stock prices entered the deeply oversold territory.
On Wednesday, we witnessed a V-shaped recovery from its multi-year falling trend line support area. In the process, the stock prices went on to form a ‘Bullish Hammer’ pattern around it.
The said pattern has been confirmed on a closing basis and hence, we expect a good relief move in this counter. One can look to go long around for a target of Rs.468 in the coming weeks. The stop loss can be placed at Rs 395.80.
Brokerage Firm: SMC Global Securities
HDFC Bank: Buy | LTP: Rs 2,122.65| Target: Rs 2,350| Stop Loss: Rs 2,000| Upside: 10%
The stock closed at Rs 2,122.65 on February 8, 2019. It made a 52-week low at Rs 1,828.50 on March 7, 2018 and a 52-week high of Rs 2,220 on July 18, 2018. The 200-day Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 2,030.07.
The short-term, medium-term and long-term bias is positive for the stock as it is continuously trading in an uptrend.
From the past few weeks, it was consolidating in a narrow range and formed an “Inverted Head and Shoulder” pattern on the weekly charts which is bullish in nature.
Although, the stock hasn’t given the pattern breakout but its consolidation indicates, there is a strong spurt for the near-term. Therefore, one can buy the stock in the range of Rs 2,100-2,110 levels for the upside target of Rs 2,300-2,350 levels and a stop loss below Rs 2,000.
Brokerage Firm: Karvy Stock Broking
Hero MotoCorp: Buy | LTP: Rs 2,888.30| Target: Rs 3,050| Stop Loss: Rs 2,715| Upside: 5.6%
Hero MotoCorp has bounced well after making a swing low of Rs 2,561 levels. The bounce occurred in the stock from the said lower levels and gave a price breakout around Rs 2,930 levels.
The historical price action in the stock reflects that any meaningful dip in the stock may attract market participants.
We suggest Smart Traders to buy the stock for the target of Rs 3,050 levels with a stop loss placed below 2,715 levels.
Kotak Mahindra Bank: Buy | LTP: Rs 1,300| Target: Rs 1,345| Stop Loss: Rs 1,250| Upside: 3.4%
Kotak Mahindra Bank ended the week with a gain of 3.45 percent outperforming the Bank Nifty index which gained approximately 0.66 percent.
The stock is in a secular uptrend and is placed above all its major moving averages in all time frames indicating positive setup in the counter.
After placing a swing low of Rs 1,211.40 in the previous week, the stock has witnessed a gradual recovery in last few trading sessions which has placed the stock towards the high of Rs 1,311 levels indicating positive momentum in the stock is likely to continue in the coming trading session.
On the momentum oscillator front, the 14 period RSI is trading above its 9-period signal line on the daily as well as weekly chart and poised with bullish bias reflecting the stock may trade with strength in the coming trading sessions.
On the Bollinger band (20, 2), the stock is placed above the mean of the Bollinger affirming the bullish view in the counter. Hence, we suggest Smart Traders to buy the stock on dips towards Rs 1,285 levels for the target of Rs 1,345 levels with a stop loss placed below Rs 1,250 levels.
JSW Steel: Sell | LTP: Rs 263| Target: Rs 239| Stop Loss: Rs 284| Downside: 9%
JSW Steel witnessed sell-off in the last two sessions after a brief consolidation. The stock price lost almost 3.87 percent whereas benchmark index Nifty Metal lost nearly 2.57 percent on a weekly closing basis.
After placing a swing low near Rs 262, the stock witnessed a pullback rally towards its 21-DEMA but wherein it found resistance and succumbed to selling pressure.
The stock price after clocking an all-time high of Rs 427, witnessed a severe price correction in the last couple of months. The stock is continuously making lower highs and lower lows exhibiting underlying weakness in the counter.
Technically, the stock price is holding below its short to medium-term moving averages. On the momentum setup oscillator, 14-period RSI after finding resistance near equilibrium levels witnessed bearish crossover its signal line and is approaching oversold territory.
On Bollinger Band (20, 2), stock price found resistance near the middle band and pierced its lower band that reflects potential weakness in the counter.
Hence we recommend Smart Traders to initiate Short position on the bounce towards Rs 266 levels for the downside target of Rs 239 placing stop loss above Rs 284 levels.
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.
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