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Last Updated : Feb 04, 2019 01:58 PM IST | Source: Moneycontrol.com

February F&O picks: 10 short-term trading ideas for the series that could give 3-15% return

V-Guard Industries, Ajanta Pharma, Infosys and Titan Company among top names

Kshitij Anand @kshanand
 
 
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Indian market climbed the wall of worries and reclaimed crucial levels to close just a shade below 10,900-level for the week ended February 1. The rally post Interim Budget saw selling pressure near 11,000 levels which still remains near-term resistance for the index.

The Nifty index had a volatile Budget day, but overall, witnessed a strong recovery of 400 points from the recent swing low of 10,583 to 10,983 zones in the last four sessions.

The index is now trading above most of its short and long-term moving averages, but can we say that we are out of the woods. Well, maybe not. Investors should remain cautious, as the index could face selling pressure at higher levels and remain stock-specific.

For the momentum to continue, Nifty index should close well above 10,985-11,000 levels while on the other hand, crucial support is placed at 10,777, 10,700, and 10,650 levels, suggest experts.

“It has seen been making higher highs - higher lows from last three trading sessions and needs to hold above 10,820 zones to extend its move towards 10,985 then a fresh leg of the rally towards 11,080 and 11,176 zones,” Chandan Taparia, Associate Vice-President, Analyst-Derivatives, Motilal Oswal Financial Services told Moneycontrol.

“While on the downside, support exists at 10,777 then 10,700-10,650 zones. The index has got stuck in a broader trading range and requires a decisive range breakout for the next leg of the rally,” he said.

India VIX fell 11.14 percent at 15.72 levels in this week which is giving some comfort to bulls but needs to hold below 16 zones to get a decisive range breakout above 10,985 zones.

On the options front, maximum Put OI is placed at 10,700 while the maximum Call OI is placed at 11,000 followed by 11,200 strikes. Call writing is seen at 11,200 and 11,100 strikes while Put writing is seen at 10,800 and 10,900 strikes.

Here is a list of top 10 short-term trading ideas that could give 3-15% return in the February series:

Analyst: Dinesh Rohira, CEO and Founder, 5nance.com

V-Guard Industries: Sell| Target: Rs 191 | Stop-Loss: Rs 208 | Downside: 4%

V-Guard continued to trade in a negative trajectory on the weekly basis to fall below its crucial support at 200-days moving average (DMA) placed at 205-odd levels despite managing to close in positive basis on daily basis.

The scrip continued to consolidate from a higher level of Rs 237 towards a low of Rs 191 levels, and made a marginal rebound but failed to close above its crucial support placed around 205.

It formed a bearish candlestick pattern on weekly price chart which resembles a Spinning Top kind of pattern. Further, a weekly RSI stood at 45 odd levels indicating persistent selling regime, and MACD is also trading below its Signal-Line. We have a sell recommendation for V-Guard which is currently trading at Rs. 199.30

Ajanta Pharma: Sell | Target: Rs 952 | Stop-loss: Rs 1,015 | Downside: 3%

Ajanta Pharma continued to consolidate on weekly time frame from a higher price band of Rs 1192 odd levels towards a low of Rs 976 levels which is just a few points away from its 52-week low.

It came under massive selling pressure in the last six trading sessions to close below its crucial support of 200-days moving average placed at Rs 1,142 odd levels.

It currently trades below all the moving average level. The scrip formed a long bearish candlestick pattern on both weekly as well as daily price chart which indicates persistent selling pressure.

The momentum indicator continued to outline weak trend with weekly RSI at 39 levels while MACD trades below its Signal-Line. We have a sell recommendation for Ajanta Pharma which is currently trading at Rs. 982.80.

Analyst: Rajesh Palviya, Head – Technical & Derivatives Analyst, Axis Securities

Infosys: Buy| LTP: Rs 756| Target: Rs 784| Stop Loss: Rs 730| Upside 4%

Since September 2018 the stock continues to consolidate in the form of "Rounding Bottom" pattern. With current close, the stock has decisively broken out from its multiple resistance zone of Rs 745 levels with huge volumes which remains a positive sign.

The stock is well placed above its 20, 50 and 100-days SMA and continues to maintain a series of higher top and higher bottom formation which supports bullish sentiments ahead.

The daily and weekly strength indicator RSI and the momentum indicator Stochastic both are in a bullish mode which reconfirms strength.

Asian Paints: Buy| LTP: Rs 1,456 | Target: Rs 1,535| Stop Loss: Rs 1,405| Upside 5%

On the daily chart, the stock has decisively broken from its six-month downward sloping trendline resistance at Rs 1429 levels with high volumes which signals positive bias ahead.

The stock is in a strong uptrend and is well placed above 20, 50 and 100-days SMA which supports upside momentum to continue ahead.

The daily strength indicator RSI and the momentum indicator Stochastic both are in a bullish mode which signals strength in the near-term.

Dr Reddy’s Laboratories: Buy| LTP: Rs 2,786| Target: Rs 2,910| Stop Loss: Rs 2,700| Upside 4%

The stock is trending up across all the time frames forming a series of higher top and higher bottom formation. With 5 percent weekly gains, the stock has decisively broken out from its almost one-year multiple supply zone of Rs 2,770-2,780 levels on closing basis which signals strength ahead.

This breakout is accompanied with rising volumes which indicate rising strength. The daily and weekly strength indicator RSI and the momentum indicator Stochastic both are in a bullish mode which reconfirms strength.

Titan Company: Buy| LTP: 991.30| Target: Rs 1040| Stop Loss: Rs 968 | Upside 5%

In the past couple of sessions, the stock has gained high volumes buying momentum and closed above its trendline resistance of Rs 980 levels.

The stock is in an uptrend and is well placed above 20, 50 and 100-days SMA which supports upside momentum to continue ahead.

The daily and weekly strength indicator RSI and the momentum indicator Stochastic both are in a bullish mode which reconfirms strength.

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

Godfrey Phillips: Buy| LTP: Rs 942.75| Target: Rs 1,020| Stop Loss: Rs 903 | Return 8%

The last three months have been fantastic for this high beta counter. The daily chart depicts a series of ‘higher highs and higher lows’ and in the process, the stock finally broke out from the trend line hurdle of Rs 930 with some authority.

Importantly, this move was supported by humongous volumes, providing credence to the price action. Post this, the stock prices saw some consolidation but we would construe this as a good buying opportunity.

We recommend going long for a positional target of Rs.1020 in coming days. The stop loss can be placed at Rs.903.

Jubilant Foodworks: Buy| LTP: Rs 1 357.95 | Target: Rs 1 565 | Stop Loss: Rs 1 212 | Return 15%

After enjoying a good multi-year Bull Run, the stock prices slipped into a consolidation mode. The last two days price action has been encouraging and due to massive bump up on Friday, the stock finally seemed to have come out of the congestion zone.

If we look at the volume activity, it has risen substantially over the past three days, indicating the emergence of strong buying interest.

Considering this price and volume development, we expect the stock to resume its higher degree uptrend. Hence, one can look to go long around Rs 1 340–1 320 for a target of Rs 1,565 in coming weeks. The stop loss can be placed at Rs 1,212.

Brokerage: SMC Global Securities

Dabur India: Buy| LTP: Rs 451 | Target: Rs 495| Stop Loss: Rs 425 | Upside 10%

The stock closed at Rs 451.85 on 01st February 2019. It made a 52-week low at Rs 311.92 on March 23, 2018 and a 52-week high of Rs. 490.65 on August 27, 2018. The 200-days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 402.83

The stock has been consolidating in a stiff range of Rs 410- 440 from last more than six weeks. This week stock has given a breakout above the key resistance level after a prolonged consolidation along with marginally higher volumes.

Additionally, the breakout above the bullish flag pattern can also be observed on weekly chart interval which is a bullish signal. So, one can initiate long in the range of Rs 450-452 levels for the upside target of Rs 492-495 levels with a stop loss below Rs 425.

HCL Technologies: Buy| LTP 1043.85| Target: Rs 1,110| Stop Loss: Rs 990 | Upside 6%

The stock closed at Rs 1043.85 on February 1, 2019. It made a 52-week low at Rs 880.05 on June 5, 2018 and a 52-week high of Rs. 1125.05 on September 25,  2018. The 200-days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 976.34

The stock has been maintaining its uptrend and trading in a rising channel on broader charts. On the technical front, it formed a rounding bottom on weekly interval and has given a breakout along with hefty volumes above the key resistance levels of 1020 levels to once again regain the upside momentum.

Therefore, one can buy the stock in a range of Rs 1,040-1,044 levels for the upside target of Rs 1,110 levels with a stop loss below Rs 990.

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.
First Published on Feb 4, 2019 01:56 pm
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