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Last Updated : Feb 13, 2020 08:32 AM IST | Source: Moneycontrol.com

Hot Stocks: A breakout on weekly charts in Lux could take it towards Rs 1,700

Wednesday’s breakout suggests that Nifty is likely to resume the northward journey as its momentum indicator are positively poised above their respective averages.

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Rohan Patil

Last week on the weekly time frame, the Nifty50 formed a bullish Piercing Line while the Bank Nifty formed a Bullish Engulfing candlestick pattern.

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Both of these candlestick patterns have bullish reversal implications and should not be ruled out even after the recent spike seen in the indices.

Benchmark index reversed after visiting its extended breakdown line in the absence of buying support in the market.

A strong positive surge for Nifty 50 on 12th February 2020 has witnessed a smaller degree horizontal trend line breakout on the daily interval.

Ahead of weekly expiry on Thursday, short recovery was witnessed in 12,100, 12,150 and 12,200 calls. And, new short built up was seen in 12,100, 12,150, 12,200, and 12,250 weekly puts.

The data suggests that the base has created around 12,150 levels, so chances of weekly expiry above 12,150 are higher.

Since the past few trading days, the Nifty is stiffly giving close above 21 & 50-Day exponential moving averages (EMA), which is positive for Indian benchmark indices.

Wednesday’s breakout suggests that Nifty is likely to resume the northward journey as its momentum indicator are positively poised above their respective averages.

In case of higher degree breakout, Nifty will face the next hurdles at 12,430 levels. However, on the lower side, the recent gap created on the 4th February 2020 (at around 11,750 mark) will continue to work as a key support point for the index.

Here is a list of top three stocks which could give 6-10% return in the next 3-4 weeks:

Bajaj Holding: Buy| LTP: Rs.3794 | Target: Rs 4,070|Stop Loss: Rs 3670|Upside 7%

After a broad-based consolidation for more than six months, Bajaj Holding has witnessed a breakout of “Ascending Triangle Pattern” on the weekly timeline.

Prices are currently sustaining above its trend line support and looking steady to move ahead. Currently, prices are sailing above all its major exponential moving averages, which is positive for the stock.

On the weekly frame, the momentum oscillator RSI (14) has given a breakout from its downward sloping trend line and is currently reading above 60 levels with positive crossover.

Traders can accumulate the stock in the range of Rs 3790-3825 for the target of 4070, and a stop loss can be placed below 3670 on a daily closing basis.

HDFC AMC: Buy| LTP: Rs.3357| Target: Rs 3575|Stop Loss: Rs 3250|Upside 6.50%

After a narrow range consolidation for the past two months, HDFC AMC has witnessed a breakout of “Rectangle Pattern” on the daily chart.

Prices are nicely poised above its trend line support and are looking to accelerate further. Currently, prices are sailing above all its major exponential moving averages on the daily interval, which is positive for the stock.

On the daily frame, Momentum oscillator RSI (14) has given a breakout from its horizontal trend line and is currently reading above 60 levels with a positive crossover.

Prices have formed a Bullish Engulfing candlestick pattern on the weekly chart. Bullish engulfing patterns normally reverses the short to the medium bearish structure when spotted at intermediate low.

Traders can accumulate the stock in the range of 3350 - 3365 for the target of 3575, and a stop loss can be placed below 3250 on a daily closing basis.

LUX Industries: Buy| LTP: Rs.1596| Target: Rs 1,760|Stop Loss: Rs 1,518|Upside 10%

A recent spurt in prices has witnessed a breakout above its Horizontal Trend line on the weekly interval chart. Currently, prices are trading in a higher high, and higher low formation on the weekly chart.

Currently, prices are trading above its 50 & 100-Days Exponential Moving Averages, which are positive for the near to mid-term.

Momentum Oscillator RSI (14) inching towards 70 levels showing strong momentum to unfold. Traders can accumulate the stock in a range of 1590 - 1610 for the target of 1760, and a stop loss can be placed below Rs 1,518 on a daily closing basis.

(The author is a Technical Analyst at Bonanza Portfolio)

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 Feb 13, 2020 08:32 am
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