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F&O expiry to keep market volatile; 5 stocks where experts see 8-16% upside

Experts point out the broader structure of the market continues to remain weak as Nifty is making a lower top and lower bottom formation.

May 26, 2020 / 01:10 PM IST
 
 
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Equity benchmarks, Sensex and Nifty, are expected to experience bouts of volatility in this truncated week amid domestic and global factors.

There is F&O expiry for the May series in this truncated week. The options data indicates that the maximum Put base is placed at 9000 followed by 8800 strikes. We have also seen fresh Put writing in 9000 and 8800 Put strikes, which are likely to act as a support zone.

Experts point out the broader structure of the market continues to remain weak as Nifty is making a lower top and lower bottom formation.

On May 22, Nifty formed a Doji pattern on the daily chart indicates indecisiveness among the bulls and the bears.

Here are five stock recommendations for the next 2-3 weeks.

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Analyst: Shabbir Kayyumi, Head of Technical Research at Narnolia Financial Advisors Ltd.

ICICI Bank | Buy | LTP: Rs 292.40 | Target price: Rs 340 | Stop loss: Rs 240 | Upside: 16.28%

The stock can form a double bottom price pattern on the daily chart if it defends its major support line, which should revolve on the upside after its brief consolidation.

The momentum oscillator RSI is in positive territory and entering into a trending phase. The MACD, too, indicates good momentum-trend follow-through.

"We recommend a 'buy' for ICICI bank around Rs 280 with a stop loss of Rs 240 and a target price of Rs 340," said the analyst.

TVS Motor Company | Buy | LTP: Rs 314.20 | Target price: Rs 350 | Stop loss: Rs 280 | Upside: 11.4%

The daily chart of the stock reveals that demand is increasing and supply is diminishing as the stock is taking support from the line of the parity showing a rebound from its lower levels.

The stock took support from the rising trendline and suggests the possibility of a pullback.

"With the chart looking attractive and a decent volume participation witnessed, we recommend a buy around Rs 305 in this stock for an upside target of Rs 350, keeping a stop loss of Rs 280 on a closing basis," said the brokerage.

Kotak Mahindra Bank | Buy | LTP: Rs 1,165 | Target price: Rs 1,300 | Stop loss: Rs 1,050 | Upside 11.6%

The stock has been witnessing sell-off over the past few days. However, the strong demand zone around Rs 1,115-1,125 zone has emerged as the support for the same.

On the weekly chart, the line of polarity suggests a strong base, until this is broken decisively. The formation of the double bottom on the daily chart indicates the consistency of positive rhythm in the stock.

"We expect the stock to perform going ahead and recommend buying around Rs 1,145 with a stop loss of Rs 1,050 for the target of Rs 1,300," said the analyst.

Analyst: Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking

Cipla | Buy | LTP: Rs 637 | Target price: Rs 688 | Stop loss: Rs 608 | Upside: 8%

The entire pharma space has been the flavor in the last couple of months. Most of the counters have given a stupendous rally of more than 30-40 percent in such a short span.

"Last month, we had highlighted the Nifty Pharma confirming a breakout from multi-year ‘Downward Sloping Channel’ and although, this month mostly has been the consolidation phase, we expect the stocks to resume their upward trajectory now," said the analyst.

Cipla went into a consolidation mode after a stellar move and since the last couple of days, it has regained momentum. In this process, the daily chart now exhibits a breakout from the ‘Bullish Flag’ pattern and considering the overall placement of momentum oscillators, the stock is likely to do well in the next few days.

Indiamart Intermesh | Buy | LTP: Rs 2,531 | Target price: Rs 2,720 | Stop loss: Rs 2,395 | Upside: 7.47%

This e-commerce company has been quiet for the last three months and this stock refused to correct severely in March mayhem that the broader markets witnessed.

In fact, after correcting a bit, the stock prices started gradually moving northwards and, in the process, has confirmed a breakout from the ‘Bullish Cup and Handle’ pattern.

The said breakout is supported by higher volumes and the analyst expects the outperformance to continue.

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.
Moneycontrol News
first published: May 26, 2020 01:10 pm

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