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Last Updated : Jan 21, 2019 02:01 PM IST | Source: Moneycontrol.com

Hindalco, Voltas among short-term trading ideas that can give 3-15% retruns

Volatility is likely to increase further as we approach Interim Budget, suggest experts and investors should be prepared for sudden movements on either side

Kshitij Anand @kshanand
 
 
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In a volatile week for Indian markets, bulls managed to maintain their hold on D-Street and pushed the Nifty back above 10,900. The index rose a little over 1 percent in the week.

Volatility is likely to increase further as we approach interim Budget, say experts, adding, investors should be prepared for sudden movements on either side. Market participants are waiting for a breakout or a breakdown before putting their money.

The price activity amid the consolidating market became lethargic as we saw overall trading range getting contracted in recent weeks. But, the situation became more frustrating, as there was no follow-up buying after the breakout.

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In the last three days of the week, the index remained in a slender range but individual stocks underwent some decent price correction. “Looking at the daily chart, we would give more weightage to a price development that confirmed the breakout from a ‘Bullish Diamond’ pattern,” Sameet Chavan, Chief Analyst - Technical & Derivatives at Angel Broking told Moneycontrol.

“This was followed by some consolidation that can be interpreted as a breather or a pullback move before extending the rally. Hence we remain upbeat as long as this price configuration is not violated,” he said.

Chavan further added that 10,840 and 10,780 are to be seen as key support levels. On the upside, he expects Nifty heading towards 10,985 first and then to test 11,050–11,150. “Such a period of boredom can be challenging for momentum traders, but it’s better to stay patient and focus more on individual stocks that are clearly bucking the trend,” he said.

Here is a list of top 10 trading ideas by different experts that could give 4-15 percent return in the next 1 month:

Analyst: Rupak De, Bonanza Portfolio

Hindalco: Buy| LTP: Rs 208.95| Target: Rs 240| Stop loss: 199| Upside: 15 percent

The stock seems to have stopped making lower lows as it found initial support at a previous swing low on the daily charts. The daily RSI is in bullish crossover and is rising.

On the higher end, the stock has potential to reach towards Rs 240 whereas on the lower end a stop loss can be maintained below Rs 199 on a closing basis.

Analyst: Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in

Voltas: Buy| LTP: Rs 533| Target: Rs 557| Stop loss: Rs 525| Upside: 4.5 percent

For the last couple of sessions, this counter appears to be consolidating in a zone of Rs 527–545 and interestingly it has registered three consecutive positive closes at the lower end of the said range despite moving flat.

Hence, it appears that it is looking to break out of this consolidation range sooner than later and once that happens the breakout can be very swift.

Positional traders should go long in anticipation of a breakout with a stop loss below Rs 525 on a closing basis and look for a target of Rs 557.

Cipla: Buy| LTP: Rs 509| Target: Rs 547| Stop loss: Rs 502| Upside: 7 percent

After the recent correction from the highs of Rs 549, this counter appears to be consolidating for the last couple of weeks around Rs 505 and interestingly the price range is becoming narrower as it is almost moving flat suggesting drying up of selling pressure.

Hence, this should eventually lead to a pullback attempt. As prices have already registered a breakout with a close above its downward sloping trendline on lower time frame charts, positional traders are advised to go long and look for a target of Rs 547. A stop loss suggested for the trade is at close below 502.

SRF: Buy| LTP: Rs 2,070| Target: Rs 2,161| Stop loss: Rs 2,027| Return: 4.4 percent

The price patterns of this counter are looking quite interesting as it is slowly inching in the upward direction after clearing all the short-term hurdles on the lower time frame charts. Hence, short term traders can go long for an initial target of Rs 2,161 with a stop loss of Rs 2027.

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

ICICI Bank: Buy| LTP: Rs 371| Target: Rs 390| Stop loss: Rs 358| Upside: 5 percent

For the past couple of weeks, the stock has decisively broken out from its multi-week consolidation (Rs 370-342) zone on the weekly closing basis indicating an upward breakout.

Currently, the stock is sustaining above this breakout level of Rs 370 that remains a positive sign. On the daily and weekly charts, the stock is trending up forming the higher top and higher bottom formation that signals a sustained trend.

The stock is well placed above its 20, 50 and 100-day SMA which reconfirms upward momentum in the short to medium-term.

The weekly strength indicator RSI and the momentum indicator Stochastic both are in a bullish mode which signals buying may occur on short-term corrections.

Adani Ports: Buy| LTP: Rs 398| Target: Rs 417| Stop loss: Rs 377| Upside: 4 percent

The stock is trending higher across all the time frame charts forming a series of higher top and higher bottom formation.

On the weekly chart, the stock has decisively broken out from its one year down sloping trend line resistance at Rs 380 on a closing basis and sustaining above the same.

The stock is well placed above its 20, 50 and 100-day SMA which reconfirms upward momentum in short to medium term.

The weekly strength indicator RSI and the momentum indicator Stochastic both are in a bullish mode that supports upward momentum to continue ahead.

Wipro: Buy| LTP: Rs 346| Target: Rs 363| Stop loss: Rs 330| Upside: 5 percent

In the previous week, the stock has closed on a strong note gaining around 5 percent. This buying momentum coupled with high rising volumes indicates increased participation on the rally.

On the weekly chart, the stock has decisively broken out from its past four-month consolidation range (Rs 340-300) on the weekly closing basis that indicates strength.

The stock is well placed above its 20, 50 and 100-day SMA that reconfirms upward momentum in the short to medium term.

The daily and weekly strength indicator RSI and the momentum indicator Stochastic both are in a bullish mode that supports upward momentum to continue ahead.

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

Indraprastha Gas: Buy| Target: Rs 295| Stop loss: Rs 265 | Upside: 5 percent

Indraprastha Gas maintained an upward trajectory for the last one week despite a negative market breadth and managed to swiftly move upward from its crucial resistance of 200-day moving average placed at Rs 269 on closing basis.

Initially, the scrip made a healthy consolidation from a price-band of Rs 320 towards a low of Rs 215. After making a strong rebound towards Rs 290, it saw a substantial fall towards the support of Rs 240 but managed to regain the upward momentum post-consolidation.

The scrip formed a solid bullish candlestick pattern on weekly price chart along with a bullish pattern on a daily scale.

The momentum indicator outlined a positive divergence in price with its RSI at 66, coupled with MACD managing to make a bullish crossover in the same period to trade above its signal line. We have a buy recommendation for Indraprastha Gas which is currently trading at Rs 280.45.

Sun TV Network: Sell | Target: Rs 504 | Stop loss: Rs 560 | Downside: 4 percent

Sun TV continued to trade in negative trajectory for an extended period to fall below its crucial support of 200-day moving average placed at Rs 640 in the previous session.

The scrip continued to consolidate from a higher level of Rs 830 towards a low of Rs 560 and made a marginal reverse trend that failed in the later period. The scrip made a 52-week low of Rs 513 in last trade that indicates sustain selling pressure.

It formed a long bearish candlestick pattern on both daily and weekly price chart. Further, a weekly RSI stood at 29 indicating persistent selling regime, and MACD continued to trade above its signal line. We have a sell recommendation for Sun TV Network that is currently trading at Rs 525.20.

ICICI Securities: Sell| Target: Rs 221 | Stop loss: Rs 240 | Downside: 3 percent

After remaining in a muted direction for 2-3 weeks, ICICI Securities came under massive selling pressure in last three trading sessions to close below its crucial support placed at Rs 250 and to trade points away from its 52-week low of 225.

The scrip breached below its all crucial moving average levels in current trade despite making an attempt to reverse the trend that failed to keep scrip under selling regime.

The scrip formed a long bearish candlestick pattern on both daily and weekly price chart that indicates persistent selling pressure.

The momentum indicator continued to outline weak trend with weekly RSI at 33. MACD started to trade below its signal line in past sessions. We have a sell recommendation for ICICI Securities that is currently trading at Rs 228.70.

Brokerage Firm: Karvy Stock Broking

Mindtree: Buy| LTP: Rs 886| Target: Rs 940| Stop loss: Rs 830| Return: 6 percent

Mindtree has been trading with a positive bias this week. The stock closed with a positive return of nearly 7 percent and outperformed its benchmark index Nifty IT that closed with a positive return of more than 4 percent during the last week.

Adding to that, the stock is trading well above its major moving averages on daily charts with positive price structure, indicating positive momentum in the stock is likely to continue in the coming trading sessions as well.

On oscillator front, the 14-day RSI is trading well above its 9-day signal line and poised with a bullish bias, indicating that stock is likely to continue its outperformance in the coming trading sessions as well.

The Parabolic SAR (Stop & Reverse) on the daily chart is trading below the price that reflects, buying will remain intact in the counter in the coming trading sessions.

From the above observation of price momentum, it seems the stock is likely to trade with positive bias in the coming trading sessions also.

Therefore, we recommend traders to initiate long position in the counter around Rs 875 with a stop loss placed below Rs 830 for the higher target of Rs 940.

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.

India Union Budget 2019: What does Finance Minister Nirmala Sitharaman have up her sleeve? Click here for top and latest Budget news, views and analyses.
First Published on Jan 21, 2019 02:01 pm
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