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Last Updated : Feb 16, 2018 08:10 AM IST | Source: Moneycontrol.com

Breakdown witnessed on Bank Nifty; 3 stocks which can give up to 10% return

The Nifty Midcap 100 index which was seen outperforming in the early part of the week is witnessing heavy offloading in the past two trading sessions.

 
 
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By Hadrien Mendonca

It has been a volatile truncated week as the benchmark indices have been dancing to the tune of global equity indices. However, the Nifty is stuck in a narrow trading range between 10400 to 10600 levels for the past seven days.

The pain point has been the bank Nifty as the index is showing sheer weakness amid the Punjab National Bank fraud which not only dragged the Bank Nifty lower but also dampened the sentiment across the street.

Close

The Nifty Midcap 100 index which was seen outperforming in the early part of the week is witnessing heavy offloading in the past two trading sessions.

Going forward, it is crucial that Nifty manages to break either of the 10400 or 10600 levels before we could see any specific direction being established.

Bank Nifty, on the other hand, is looking weak, especially the PSU bank index, which has given a fresh breakdown. Bank Nifty has created a bearish engulfing pattern on the daily chart on Wednesday.

A crack below Wednesday’s low of 25212 would lead to the fresh downside for the Bank Nifty up to 25000 psychological levels while on the upside 25700-25750 is crucial resistance.

Here is a list of stocks that can deliver up to 7-10% returns in the short term:

Ashok Leyland Ltd: BUY| Target Rs 150| Stop Loss Rs 131| Returns 9.4%

The stock been consolidating for over 16-weeks and has finally broken out from a consolidation Rectangle pattern on the daily chart.

The price outburst has been accompanied by a smart uptick in traded volumes. In addition, the stock continues to sustain above all its crucial short as well as medium-term moving averages.

We expect Ashok Leyland to make a dash towards its potential target of Rs150 in the near term. It is advisable to keep a stop loss around Rs131.

Mastek: BUY| Target Rs 540| Stop Loss Rs 481| Returns 8.2%

Nifty witnessed consolidation for the past three weeks and now the time correction has finally come to an end as Mastek has broken out from a consolidating pattern on the weekly charts.

Our monthly chart analysis also suggests that the stock has managed to sustain the double top breakout for the second consecutive month with a credible uptick in volumes.

In addition, the relative strength index (RSI) has also surpassed the 60 mark further indicating that the current up move is likely to continue.

Coal India Ltd: BUY| Target Rs 328| Stop Loss Rs298.5| Returns 6.4%

The stock has broken out from a Symmetrical Triangle pattern on the weekly chart. A close above Rs 304 would confirm the same on the weekly closing basis.

The weekly and the daily relative strength both are sustaining above the 60 mark which is a sign of strength. We expect the stock to rally higher towards Rs 328 which translates into a 6.4% returns in the medium term.

Disclaimer: The author is Senior Technical Analyst, IIFL. 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.

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First Published on Feb 16, 2018 08:10 am
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