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Last Updated : Mar 19, 2020 07:44 AM IST | Source: Moneycontrol.com

Hot Stocks | Buy BEL, Minda Industries for up to 17% return in short term

As per the moving average, Nifty has drifted below its 100-day exponential moving average on the monthly time frame.

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Rohan Patil

Benchmark Index Nifty breached 8,500-mark and closed below the same with a loss of 5.56 percent, forming a bearish candle, on March 18.

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As per the moving average, Nifty has drifted below its 100-day exponential moving average on the monthly time frame.

The index has corrected almost 38.20 percent from the all-time high levels by connecting the lows of October 2008.

Nifty, on the monthly chart, has broken its 11-years rising channel pattern.

If the index closes below 8,800 level till March 2020 expiry, then the said bearish pattern will come to play.

The current chart structure on any time frame only indicates bears overweight bulls.

Additionally, the Indian Volatility Index (VIX) has spiked above 63.95 levels.

Earlier, we witnessed the same level of volatility in the year of 2008 and 2009. This observation indicates that further downward momentum with some wild swings cannot be ruled out.

Current chart formation suggests Nifty may find major support at around 8,000 level which is well supported by a December 2016 lows.

However, on the higher side, the index will continue to face hurdles around the 9,600 levels. In case of a sharp short-covering, Nifty may go to 10,200 level.

Here are two buy and one sell call for the next 3-4 weeks:

Bharat Electronics (BEL) | Buy | LTP: Rs 71.20 | Target: Rs 83.30 | Stop loss: Rs 69.50 | Upside: 17%

In the recent fall, the stock has drifted near its six-year low and formed a bullish Nen Star Harmonic Pattern on the weekly chart.

Previous week's candle was a bullish Dragonfly candlestick pattern.

The stock is trading above its potential reversal zone (PRZ) level. Prices have also formed Bullish Engulfing pattern on weekly time frame, which adds double confirmation to the prices.

Furthermore, momentum oscillator RSI (14) has witnessed Bullish Divergence near oversold zone and is currently reading near 30 levels on the weekly graph.

Traders can accumulate the stock in a range of Rs 74.20–75.25 for the target of Rs 83.30 with a stop loss below Rs 69.50 on a daily closing basis.

Minda Industries | Buy | LTP: Rs 255 | Target: Rs 296 | Stop loss: Rs 240 | Upside: 16%

The stock is trading in a broad range of consolidation for the last three years. Currently, prices are trading near the lower band of the rectangle pattern on the weekly time frame.

Prices are trading near its 50-month exponential moving average, which is acting as near-term support for the stock.

Momentum Oscillator RSI (14) has drifted below 20-level which is the extremely oversold level. It has also witnessed bullish divergence near oversold zone.

During October 2018, RSI had drifted below 20 levels and witnessed a sharp recovery in prices.

Traders can accumulate the stock in a range of Rs 255 - 259 for the target of Rs 296 with a stop loss below Rs 240 on a daily closing basis.

UPL | Sell | LTP: Rs 324.95 | Target: Rs 291 | Stop loss: Rs 338 | Downside: 10%

UPL has breached its almost four-year-long horizontal trend line and is currently trading below its support level on a weekly timeline.

Most indicators and oscillators are negatively poised and are looking week.

The stock has drifted below its 100-month exponential moving average on the monthly time frame, which indicates bears are in full control to push price lower.

Sharp fall in the stock has forced prices to breach below its July 2018 low. Traders can short the stock in a range of Rs 320 - 323 for the target of Rs 291 with a stop loss above Rs 338 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 Mar 19, 2020 07:44 am
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