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Experts suggest stock-specific approach: Top 10 trading ideas for the next 3-4 weeks

The index has been trading with heavy gains and is struggling to hold 11900 levels. Hence, 11850/11900 is likely to remain an important resistance zone in the short term.
Oct 19, 2020 / 10:00 AM IST
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Indian market witnessed profit-taking at higher levels last week triggered by fears of a second wave of lockdown across Europe.

Nifty50, which reclaimed 12,000, failed to hold onto the crucial support and closed with losses of over 1 percent for the week ended October 16. Back home, the stimulus packages unveiled by the government also failed to cheer investor sentiment.

Experts are of the view that as long as Nifty50 stays below 11,900-12,030, consolidation is likely to continue. On the downside, supports exist at 11200.

“The Nifty 50 recorded a big bearish candle this week, which is a sign of market trading at overbought levels in the short-term and loss of control by the bulls,” Umesh Mehta, Head of Research, Samco Group told Moneycontrol.

“The index has been trading with heavy gains and is struggling to hold 11,900 levels. Hence, 11850/11900 is likely to remain an important resistance zone in the short term,” he said.

Mehta further added that on the downside 11200 is an important support as it coincides with the channel support on the weekly chart. Investors should adopt a buy-on-dips strategy only in quality names.

Here is a list of top 10 trading ideas by experts which could give a 7-18% return in the next 3-4 weeks:

Expert: Rajeev Srivastava, Chief Business Officer at Reliance Securities

Godrej Properties: LTP: Rs 865 | Buy| Target: Rs 1025| Stop Loss: Rs 782| Upside: 18%

The stock has completed its price and time-wise consolidation after a sharp up move, and now we expect a fresh move as we expect to cross the 200-Day average

The stock is trading above all its long-term monthly averages and an inside range on monthly charts suggests an upper break out from current levels. Oscillators and momentum indicators like RSI and MACD are showing strength in the stock.

NMDC: Buy| LTP: Rs 83| Target: Rs 99| Stop Loss: Rs 81| Upside: 19%

The stock witnessed a breakout above its short and medium-term averages with strong volumes. The sector is in positive momentum and RSI crossing upwards from its average line gives a confirmation of a strong move.

On the higher side, we expect a move near to 92 levels and crossover of the same would extend to 99 levels over the next few weeks.

Tata Consumer: Buy| LTP: Rs 477| Target: Rs 535| Stop Loss: Rs 445| Upside: 12%

The stock has declined by 20 percent from its recent high and witnessed support near to its 100-Day average.

We believe that the stock has completed his 8-week fall and closed in a positive Doji on weekly charts confirming a reversal trend.

We expect the stock to bounce back over the next few weeks as RSI has also turned positive on the daily charts.

Expert: Sacchitanand Uttekar, DVP – Technical (Equity), Tradebulls Securities

HDFC Bank: Buy| LTP: Rs 1199| Target: Rs 1300| Stop Loss: Rs 1138| Upside 8%

HDFC Bank was the first to uplift the spirits within the banking names as the index was at a crux of a rebound. The ‘V’ Shaped recovery in the past 2 weeks has been significantly fuelled up with volumes as it managed to surpass and sustain above its previous resistance zone of 1150.

Though the stock did witness a pullback along with the indices the result announcement could re-establish its bullish momentum once above 1225.

The pattern indicates a price target up to 1300 which could be participated with fresh longs with a trading stop below 1138.

Tata Steel: Buy| LTP: Rs 393| Target: Rs 422| Stop Loss: Rs 379| Upside 7%

Since the last 9 trading sessions, the stock has been oscillating near its 200-DEMA zone. Its options data indicated strong bounds been placed at 370-400.

The recent rebound from the lower bound of this range remained significant as it managed to close the current week above its 8-Days swing high along with a significant jump in its daily RSI to 57 from 46 in just a single day.

Even on the weekly scale, the stock has already established a ‘Bullish Harami’ pattern couple of weeks back which was awaiting confirmation.

With the pattern now confirmed the corrective wave seems to have terminated as bullish momentum seems re-established on the final day of the week.

Traders could accumulate up to 387 for an initial up move towards 422 (78.6% retracement of its prior down wave) with a stop below 379.

MGL: Buy| LTP: Rs 821| Target: Rs 910| Stop Loss: Rs 805| Upside 10%

The stock is now in close proximity to its support range, the occurrence of a ‘Spike’ on its weekly scale is an early indication of the same. On its daily scale it had been oscillating lower but within a ‘Falling Wedge’ formation.

Usually, this pattern marks the termination of the declining move & arising signs of a fresh bullish trend.

The short-term, as well as long term investors, should accumulate the stock from hereon as a folio buy. Momentum traders should add aggressive longs once above 835 with a stop below 805 for a pattern target up to 910.

Bharti Airtel: Buy| LTP: Rs 401| Buy above Rs 415| Target: Rs 450| Stop Loss: Rs 398| Upside 8%

After 8-weeks of a sharp decline, the momentum seems to be getting attested as the stock holds above its long-term support average placed around 400.

Even on its daily scale, there is clear evidence of positive divergence on the daily RSI, which is an early sign of a trend reversal.

The latest ‘Homing Pigeon’ formation on its daily scale needs affirmation which could set the bullish tone once above 415. Trading longs could be considered once above 415 with a stop below 398 for a strong short-covering based move beyond 450.

Muthoot Finance: Buy| LTP: Rs 1184| Target: Rs 1250| Stop Loss: Rs 1148| Upside 5%

On the daily scale, the ongoing bullish ‘Flag’ formation looks mature for a breakout. The recent ‘Engulfing bullish’ formation reconfirmed the 20-Days EMA support while it also holds steady above its 20 WEMA level.

Positional longs should be still considered with a trailing stop below 1,148 even for an immediate target up to 1250.

Blue Star: Buy| LTP: Rs 637| Target: Rs 685| Stop Loss: Rs 605| Upside 7%

Blue Star has been oscillating well within its ongoing symmetrical triangular formation. The recent rebound from the 605 zone not only confirmed the pattern support but also reaffirmed the strength of its 200-Days EMA.

Volume action during the week gone by has been significant as compared to its last 3 weeks. Proximity towards the base of the pattern provides a good reward to risk opportunity for fresh positional longs as the pattern resistance is placed around 685. Long positions should be maintained with a stop below 605.

Expert: Sameet Chavan, Chief Technical & Derivatives Analyst at Angel Broking

JSW Steel | LTP: Rs 311.35 | Target price: Rs 335 - 342 | Stop loss: Rs 288 | Upside: 10%

The metal pack recently went through some consolidation and did not correct in Thursday’s selloff.

On Friday, stocks within this space just took off, especially the steel counters.

In this course of action, JSW Steel gave a stellar move to confirm a huge breakout to hit a new 52-week high.

On a small timeframe, we can see the ‘Inverse Head and Shoulder’ pattern, whereas on a larger scale, the bullish ‘Cup and Handle’ pattern has been developed.

Since the up move is backed by sizable volumes, we can consider this as a genuine breakout, and hence, it unfolds bigger targets for months to come.

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.
Kshitij Anand is the Editor Markets at Moneycontrol.

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