After a sharp rally on June 3, the market took a cautious approach on the next day ahead of RBI policy meet outcome on June 6. Nifty closed the day at 12,095, down 0.55 percent. Broader market indices outperformed the benchmark with BSE Midcap and Smallcap losing 0.2 percent and 0.19 percent, respectively.
Nifty has formed bearish Harami candlestick pattern, i.e. a bullish long candle followed by a small body candle. However, the overall trend remains positive for the market and sustaining above 11,960, it can rally towards 12,300-12,380 on the upside.
On the downside, supports for the market are seen at 11,850-11,830. Breaking below it, profit booking can be seen towards 11,650-11,600.
In Nifty options, maximum open interest for Put was seen at strike price 11,000 followed by 11,500; while for Call maximum open interest was seen at 12,500 followed by 12,000. Put writing was seen in 11,800 along with some Call writing in 12,100.
India VIX closed at 15.63, down 2.1 percent for the day. A steady decline in VIX over the last seven sessions has been supportive for the market. Further decline will aid the markets sustaining above 12,000.
Here are five stocks that could return 12-15 percent:
Deepak Nitrite: Buy | CMP: Rs 327 | Stop loss: Rs 310 | Target: Rs 375 | Return: 15 percent
The stock had been consolidating for the last 17 months between Rs 305 and Rs 205. It has formed W shaped pattern on weekly chart. Last week stock witnessed breakout on the upside with strong momentum and good volumes indicating buying participation in the stock.
Price has given a breakout on the upside from Bollinger Band with the expansion of bands indicating a continuation of the trend in the direction of breakout on the weekly chart. The Average Directional Index (ADX) line indicator of trend strength has turned up from the equilibrium level of 20 on weekly charts.
Momentum indicators are in bullish mode on daily and weekly charts. Thus, stock can be bought at current levels and on dips to Rs 322 with stop loss below Rs 310 for the target of Rs 375.
Havells India: Buy | CMP: Rs 780 | Stop loss: Rs 740 | Target: Rs 900 | Return: 15 percent
Stock is in long term uptrend forming higher tops and higher bottoms on the weekly chart. For the last 12 weeks, the stock has been consolidating at all-time high levels. It has formed short term double bottom pattern between Rs 780 and Rs 710 on the daily chart. The lows of patterns were formed at 100-day moving average that has acted as support for the stock in the past.
On daily charts, the price has given a breakout on the upside from Bollinger Band with an expansion of bands indicating a continuation of the trend in the direction of the breakout. Relative strength index and Stochastic have given positive crossover with their respective averages on the weekly chart. Thus, stock can be bought at current levels and on dips to Rs 770 with stop loss below Rs 740 for a target of Rs 900.
V-Guard Industries: Buy | CMP: Rs 243 | Stop loss: Rs 230 | Target: Rs 280 | Return: 15 percent
The stock was trading between Rs 235 and Rs 160 for the past one year. It has formed a bullish inverted head and shoulders pattern on the weekly chart. Last week, the stock witnessed breakout from the pattern with strong momentum and high volumes indicating buying participation in the stock.
Price has given a breakout on the upside from Bollinger Band with an expansion of bands indicating the continuation of the trend in the direction of breakout on daily and weekly charts. The Average Directional Index (ADX) has turned up from the equilibrium level of 20 on the weekly chart. Momentum indicators are in bullish mode on daily and weekly charts. Thus, stock can be bought at current levels and on dips to Rs 239 with stop loss below Rs 230 for a target of Rs 280.
Axis Bank: Buy | CMP: Rs 823 | Stop loss: Rs 790 | Target: Rs 920 | Return: 12 percent
Stock is in uptrend forming higher tops and higher bottoms since last October low Rs 534. On the daily chart, the stock has formed a bullish pole and flag pattern which is a continuation. It has seen breakout on the upside in last trading session.
Stochastic has given positive crossover with its average on the daily chart. MACD line has given a positive crossover with its average on the weekly chart. Thus, stock can be bought at current levels and on dips to Rs 810 with stop loss below Rs 790 for a target of Rs 920.
Can Fin Homes: Buy | CMP: Rs 365 | Stop loss: Rs 348 | Target: Rs 420 | Return: 15 percent
Stock formed rectangular base between Rs 298 and Rs 215 over a period of six months. Volumes were high indicating accumulation in the stock. In early March stock witnessed breakout from the pattern with strong momentum and volumes. It went on to touch high of Rs 369 and then corrected down to test breakout level. Since then, the stock has rallied back to current levels and consolidating below the previous high of Rs 369.
Stochastic has given positive crossover with its average on the daily chart. Thus, the stock can be bought at current levels and on dips to Rs 360 with stop loss below Rs 348 and for a target of Rs 420.
The author is Head of Technicals and Derivatives at Sanctum Wealth Management.
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.
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!
