Ashish Chaturmohta
The market saw a strong gap-up opening on April 15 but failed to hold on to higher levels. Weak global cues and domestic concerns over the extended lockdown dragged benchmark indices into negative territory towards the close of the session.
The Nifty50 has largely been range-bound between 9,200 and 7,500 levels for the last four weeks. It has formed an ascending triangle on the daily chart.
A breakout on the upside will be seen once the Nifty starts to trade above 9,100 on a sustainable basis. A consistent close above 9,100 could take the index towards the 9,600-9,700 level.
On the downside, the short-term rising support trendline comes around at 8,550-8,600. A break below this level is likely to see a deeper decline towards 8,000.
In the Nifty April monthly expiry options, maximum open interest for Put is seen at strike price 8,000 followed by 9,000; while for Call maximum open interest is seen at 10,000 followed by 9,000.
After touching 11-year high of 86.6, India VIX index has seen cooling off and is at 50 levels. VIX is hovering around 50 after the decline and could move higher if it sustains at current levels, which will lead to selling pressure. It needs to move below 40 levels for the market to sustain above 9,000.
Here is a list of top 5 stocks that can give 15-17 percent return over 1-3 months:
Bharti Airtel Ltd: Buy| LTP: Rs 510| Stop Loss: Rs 480| Target: Rs 600| Upside 17 percent
The stock has seen a major multi-year consolidation between 540 and 220 levels on the monthly chart. The last up move was seen from the lower end of the range amid high volumes which indicates accumulation in the stock.
The long-range bullish candles on the monthly chart indicate a strong momentum that is likely to give a breakout on the upside.
The recent pullback from the all-time high of Rs 569 has taken support at 200-day moving average at around 400-odd levels. Also, the stock has formed a short-term double bottom pattern and then bounced back.
MACD has moved above the equilibrium level of zero on the daily chart. The stock can be bought at current levels and on dips towards 500 with a stop loss below 480 and a target of Rs 600.
Looking at the broader monthly charts, the stock has formed a rounding bottom out pattern over the four-year period. Volumes at lower levels have been high, which indicates accumulation in the stock.
The stock has seen a breakout on strong momentum amid high volumes. The price has given a breakout on the upside from Bollinger Band with the expansion of the bands on the weekly chart, which indicates the continuation of the trend in the direction of the breakout.
The stock has crossed the swing high of 3,690 and is trading at a four-and-half-year high. The Average Directional Index (ADX) line, an indicator of trend strength, has turned up from the equilibrium level of 20 with a rising Plus Directional line on the daily chart.
Thus, the stock can be bought at current levels and on dips towards Rs 3,730 with a stop loss below Rs 3600, and a target of Rs 4,450.
HDFC Asset Management: Buy| LTP: Rs 2,616| Stop Loss: Rs 2,485| Target: Rs 3,025| Upside 15 percent
The stock has seen a major fall from the all-time high of Rs 3,844 to touch a low of Rs 1,962. Here, the stock has taken support around the pivotal high of Rs 1,970 and managed to bounce back.
Also, the panic low of the last month which was formed around 2,000 was retested and then we saw a rally back to current levels. Volumes at lower levels have been above average suggesting accumulation at lower levels.
Relative strength index (RSI) and Stochastic have given a positive crossover with their averages on the weekly chart. Thus, the stock can be bought at current levels and on dips towards Rs 2,575 with a stop loss below Rs 2,485, and a target of Rs 3,025.
Berger Paints Ltd: Buy| LTP: Rs 512| Stop Loss: Rs 485| Target: Rs 600| Upside 17 percent
The stock touched an all-time high of Rs 597 in February this year and then declined to Rs 389. The stock has retraced 61.8 percent Fibonacci retracement of the major rise from 300 to 597.
The initial bounce back from the low faced the resistance at 500 levels and then corrected to 442 levels. Here, the price has taken the support at 200-day moving average and moved higher to form a higher low.
Volumes at lower levels were above average suggesting accumulation. The RSI has given positive crossover with average on the weekly chart.
Thus, the stock can be bought at current levels and on dips towards Rs 503 with a stop loss below Rs 485 and a target of Rs 600.
Eicher Motors: Sell| LTP: Rs 13,318| Stop Loss: Rs 14,000| Target: Rs 11,000| Downside 17 percent
The stock is in a major downtrend, forming a lower top and lower bottom on the weekly chart. The stock has formed a bearish head and shoulders pattern on the monthly chart.
It has given a breakdown below the key support of 15,000 i.e. neckline level of the pattern and trading below it. A breakdown has been observed on high volumes, which indicates selling pressure in the stock.
The bounce-back has been minor in nature. The momentum indicators are in a bearish mode in the short-term as well as on the long-term chart.
Thus, the stock can be sold at current levels and on the rise towards Rs 13,500 with a stop loss above Rs 14,000, and a target of Rs 11,000 levels.
(The author is Head of Technical and Derivatives, Sanctum Wealth Management)
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.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
