Shabbir Kayyumi
Benchmark index Nifty50 managed to close above 200-DMA after nearly four months, signifying dominating bulls in action. Meanwhile, traditional Kagi chart is showing higher top & higher bottom formation on daily and weekly timeframe and green lines are pointing upwards suggesting markets are in an uptrend.
Recently Nifty has taken support from the line of polarity standing around 10,580 levels and bounced back towards 10,900 which are suggesting bulls are not ready to give up and prices are in a strong hand. At the same time, indicators and oscillators are also showing a conducive scenario for the coming sessions. MACD has given a positive crossover with its average near-equilibrium level of zero on the weekly chart suggests positive bias to continue in mid-term as well.
Furthermore, Nifty's 50 DMA has crossed over 100-DMA forming a Golden Crossover pattern that suggests prices are ready to soar northwards towards an unfilled gap standing around 11,260 mark. However, one needs to be cautious if a decisive move below 10,580 comes which will be an early sign of trend reversal.
Banking index has managed to give a breakout of Inverse Head and Shoulders pattern on lower time frame by trading above 21,800 levels which can push it higher towards 22,600.
Here are three stocks which can return 6-10 percent in short-term:
ICICI Prudential Life Insurance Company: Buy Around Rs 435 | Target: Rs 480 | Stop Loss: Rs 406 | Upside: 10 percent
In the last few weeks, this counter has been moving in a well-defined ascending channel with multiple touchpoints and appears to be having strong support around Rs 410-415 levels as it bounced back many times from the demand zone of the mentioned channel. Moreover, scrip is trading above all its significant moving averages on the daily chart implying strength. Hence, the stock sustained above this support then a decent target of Rs 480 is not ruled out in this counter over a given period of time. Therefore, investors should accumulate this scrip around Rs 435 with a suggested stop loss of Rs 406 for the upside target of Rs 480.
ICICI Bank: Buy Around Rs 352 | Target: Rs 390 | Stop Loss: Rs 336 | Upside: 10 percent
Bargain hunting is seen at lower levels in the scrip from where it formed a strong base near 200-SMA. Currently, it has formed a double bottom on the daily chart along with positive divergence in RSI which suggests a reversal is around the corner. Indicator and oscillators also lending support to the price action. Traders can take an entry from the level of Rs 352 for the target of Rs 390 while keeping stop loss of Rs 336 levels.
HDFC: Buy Around Rs 1,810 | Target: Rs 1,919 | Stop Loss: Rs 1,727 | Upside: 6 percent
On the weekly chart, the stock has formed a double-bottom trend reversal pattern. Volumes have been high at lower levels, indicating accumulation in the stock. After a recent rally from the lower end of the range, the stock formed higher lows with higher highs, leading to the formation of inverted head and shoulder pattern on the hourly chart. The MACD has given a positive crossover with its average above equilibrium level of zero on the daily chart. Thus, stock can be bought at current around Rs 1,810 with stop loss below Rs 1,727 for a target of Rs 1,919 levels.
The author is Head of Technical 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.
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