Nifty has formed opening bearish Marubozu candlestick pattern on the weekly timeframe that implies bearish sentiment. This month's pivot point is placed around 11,839 and S1 level is around 11,574
Budget impact continued last week but Nifty found support from its upward sloping line that connects major swing lows of 10,000, 10,585, 11,110. Momentum oscillator stochastic turned bullish after forming a positive divergence from its oversold zone. But Nifty has not fully filled the gap of 11,426-11,591.
Nifty is trading near its major support of 100-day simple moving averages (100-DMA) placed around 11,500 but confirmation of reversal will come only above 5-week EMA trading around 11,700. Interestingly, India VIX continues to remain soft in spite of negative sentiments.
Nifty has formed opening bearish Marubozu candlestick pattern on the weekly timeframe that implies bearish sentiment. This month's pivot point is placed around 11,839 and S1 level is around 11,574.
Bank Nifty almost touched its previous high last week but could not sustain on higher levels. It traded lower throughout the last week forming a big bearish body candlestick pattern. Oversold oscillators on the lower time frame and strong support of 50-DMA around 30,550 suggest short term bounce back towards 5-EMA (30,900) and monthly pivot point placed around 31,026.
Here are five stocks that could return 10-20 percent in near term:
Hindustan Oil Exploration Company: Buy around Rs 125 | Target: Rs 150 | Stop loss: Rs 109 | Upside: 20 percent
Scrip took a sharp rebound on the upside after hitting the low of Rs 110 and started consolidating which turned in the formation of Pole & Flag pattern on the daily chart. But the breakout of this continuous pattern is expected above Rs 130 from where it will gain upward momentum
Currently, it has formed a strong base near 20-DMA at Rs 120. RSI and MACD indicators are looking firm that indicates support at current levels too. One can go long in HOEC around Rs 125 for the target of Rs 150 with a stop loss of Rs 109.
Manappuram Finance: Buy around Rs 126 | Target: Rs 150 | Stop loss: Rs 113 | Upside: 19 percent
On a weekly chart, the stock has taken support from its horizontal trough due to the concept of point of parity that indicates halt in the retracement of the scrip. On a daily chart, it took support from 100-day SMA, which gives buying opportunity in the scrip.
Moreover, declining histogram in MACD on hourly chart indicate positivity in the counter. Based on the above technical set up, we are expecting an upside momentum in the counter in the coming days. We recommend buying Manappuram around Rs 126 with a stop loss of Rs 113 and for the target of Rs 150.
Federal Bank: Buy around Rs 105 | Target: Rs 118 | Stop loss: Rs 99 | Upside: 12 percent
Scrip is moving in a well defined ascending channel with multiple touch point and has strong support around Rs 100-102 levels as it has bounced back a couple of time from the demand line. It has also maintained its uptrend on the long term chart and is trading well above its short and long term moving averages.
The momentum oscillator, RSI also favours the price pattern. One can accumulate the stock around Rs 105 for an upside target of Rs 118 and a stop loss below Rs 99.
DCB Bank: Buy around Rs 234 | Target: Rs 260 | Stop loss: Rs 218 | Upside: 11 percent
Scrip is moving in a well defined ascending channel with multiple touch points and has strong support around Rs 225-230 as it has bounced back a couple of time from the demand line.
It has also maintained its uptrend on the long term chart and is trading well above its short and long term moving averages. RSI also favours the price pattern. One can accumulate the stock around Rs 234 for an upside target of Rs 260 and a stop loss below Rs 218.
Birla Corporation: Buy around Rs 620 | Target: Rs 680 | Stop loss: Rs 588 | Upside: 10 percent
The stock has witnessed a decent correction recently from a peak of Rs 684 and now has formed the double bottom pattern. From last few days, it has been trading above its all significant moving averages that indicate strength.
Indicators and oscillators are also looking firm lending support to price action. With the chart looking attractive and decent volume participation witnessed, we recommend buying around Rs 620 for an upside target of Rs 680 and a stop loss of Rs 588.
The author is Head of Technical & Derivative Research at Narnolia Financial Advisors Ltd.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.The Great Diwali Discount!
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