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Last Updated : Mar 12, 2019 03:58 PM IST | Source: Moneycontrol.com

'F&O data indicates support for Nifty shifting higher, 11,500 possible'

VIX has seen cooling off from high of 19 this month. Further decline with be positive for the market and for breakout to sustain. Rise in VIX from current level would put a pause in current rally.

Moneycontrol Contributor @moneycontrolcom
 
 
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Ashish Chaturmohta

The market opened in positive on March 11 and went from strength to strength as the session progressed, to close at highest level since September 21, 2018.

Nifty finally settled at 11,168 up by 1.2 percent for the day. Broader market indices BSE Midcap and Smallcap gained 1.96 percent and 1.6 percent, respectively outperforming the benchmark. Market breadth on NSE was positive with five stock advancing for every two declines.

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For the last couple of months, Nifty had been trading sideways in the range of 11,100-10,550. Now index has given breakout from the range with long body bullish candlestick on the daily chart. Also, it has crossed 61.8 percent Fibonacci retracement of the fall from September of 11,760 to October low of 10,004 last year.

The index has given breakout from Bollinger Band with an expansion of bands indicating a continuation of the trend in the direction of breakout on the daily chart. Thus, the breakout has opened a possibility of reaching 11,385 and then 11,500 on the upside. On the downside, the index needs to hold above 11,050 for current uptrend to continue.

Nifty options: Maximum open interest for Puts is seen at strike price 11,000 followed by 10,800; while for Calls it is seen at strike price 11,400 and 11,500. Put writing was seen in 11,000 and 11,100 along with out of the money 11,400 Call writing. Thus, indicating supports are shifting higher and opening of immediate levels.

India VIX closed flat at 14.90. VIX has seen cooling off from high of 19 this month. Further decline will be positive for the market and for the breakout to sustain. Rise in VIX from current level would put a pause in the current rally.

Here are the top stock trading ideas which can give good returns:

Petronet LNG: Buy | CMP: Rs 239 | Stop loss: Rs 228 | Target: Rs 275 | Return: 15 percent

After touching the all-time high of Rs 275 in November’17, stock corrected down to Rs 202 in May’18. Since then it has formed multiple lows around Rs 202 indicating as value area for the stock.

The stock has given a breakout on the upside from five months consolidation between Rs 202 and Rs 232. Also looking at broader time frame, the stock is forming W shaped bottoming out pattern on weekly chart.

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 breakout on daily as well as on weekly chart. The Average Directional Index line indicator of trend strength has moved above the equilibrium level of 20 on the daily chart.

Thus, the stock can be bought at the current level and on dips to Rs 236 with a stop loss below Rs 228 for a target of Rs 275.

Bharat Electronics: Buy | CMP: Rs 91.6 | Stop loss: Rs 86 | Target: Rs 105 | Return: 15 percent

The stock has witnessed decline from December’17 high of Rs 193 to September’18 low of Rs 74. Since then, the stock has taken support at Rs 74 on multiple occasions. But forming lower tops, thus forming descending triangle pattern on daily chart. Volumes have been above average during this phase indicating accumulation in the stock at lower levels.

After last week’s breakout from the pattern, price retraced back to breakout level and took support to resume the uptrend. The Average Directional Index line indicator of trend strength is higher from the equilibrium level of 20 on the daily chart.

Thus, the stock can be bought at current level and on dips to Rs 90 with a stop loss below Rs 86 for target of Rs 105.

L&T Finance Holdings: Buy | CMP: Rs 144.7 | Stop loss: Rs 137 | Target: Rs 170 | Return: 18 percent

The stock had seen a sharp decline from August high of Rs 189 last year to November low of Rs 110. Price bounced back to Rs 159 where it faced resistance at 200-day moving average and declined to Rs 120 to test previous low. The stock has rallied back to current levels to form higher low indicating buying coming at higher levels.

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 breakout on the daily chart. MACD line has moved above the neutral level of zero on the daily chart.

Thus, the stock can be bought at the current level and on dips to Rs 142 with a stop loss below Rs 137 for a target of Rs 170.

Coromandel International: Buy | CMP: Rs 490 | Stop loss: Rs 460 | Target: Rs 575 | Return: 17 percent

The stock has consolidated between Rs 475 and Rs 340 for the last ten months. It has formed a bullish cup and handle pattern on weekly chart which is a reversal chart formation. Last week, the stock has seen a breakout from the pattern with strong momentum and high volumes.

Price has also given a breakout on the upside from Bollinger Band with an expansion of bands indicating a continuation of the trend in the direction of breakout on the daily chart. MACD line has given positive crossover with its average and moved above the neutral level of zero on the daily chart.

Thus, the stock can be bought at the current level and on dips to Rs 480 with a stop loss below Rs 460 for a target of Rs 575.

Voltas: Buy | CMP: Rs 625 | Stop loss: Rs 594 | Target: Rs 700 | Return: 12 percent

The stock touched all-time of Rs 675 in December’17 and since then it has been in negative to sideways correction for last 14 months. The stock has given breakout from the correction last week.

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 breakout on the daily chart. MACD line on the weekly chart has given positive crossover with its average and moved above the neutral level of zero.

Thus, the stock can be bought at the current level and on dips to Rs 615 with a stop loss below Rs 594 for a target of Rs 700.

The author is Head of Technical and Derivatives at Sanctum Wealth Management.

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.

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First Published on Mar 12, 2019 03:58 pm
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