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Hot Stocks | Double-digit return in Zydus Lifesciences, RITES, Star Health possible in short term. Here's why

Star Health & Allied Insurance Company has bottomed out with a V-shape recovery and now it is likely to form a bullish Inverse Head and Shoulder formation in recent pullback as Rs 660-640 is a strong demand zone.

August 17, 2022 / 06:05 AM IST
 
 
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The Nifty50 is continuing its northward journey fuelled by a fear of missing out (FOMO) among FIIs after the Nifty crossed the 200-DMA (day moving average) without entering into a bear market. The FIIs, who were selling at the 15,500 level, and buying at the 17,500 level, as the Indian economy and the stock market remained resilient in a tough time. Global cues will play an important role after a strong Q1 earnings season, however, our market may continue to outperform.

Technically, the Nifty has taken out key trendline resistance placed at 17,700 level that may lead to further strength towards the 18,000-18,100 levels. On the downside, 17,700 will now act as an immediate support level then 17,500-17,400 is the next demand zone.

Bank Nifty is outperforming, however, 39,400 is an immediate hurdle. And, if it manages to trade above 39,400, then we can expect a move towards 39,000. On the downside, 38,700-38,400 will be the immediate demand zone.

Here are three buy calls for next 2-3 weeks:

RITES: Buy | LTP: Rs 276 | Stop-Loss: Rs 262 | Target: Rs 305 | Return: 10.5 percent

The counter is coming out of falling channel formation along with decent delivery-based activity in the last few days. There was a bullish pin bar candlestick formation at 100-DMA which suggests buying interest at lower levels.

Momentum indicators are positively poised to support the current momentum in this counter. On the upside, Rs 287 is an immediate hurdle then Rs 305 is an imminent target.

On the downside, rising 20-DMA around Rs 263 will act as an immediate support level.

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Zydus Lifesciences: Buy | LTP: Rs 398.55 | Stop-Loss: Rs 380 | Target: Rs 444 | Return: 11 percent

The counter is breaking out after building a beautiful base around Rs 340 level. It is trading above its all-important moving averages and closing above 200-DMA will generate further thrust in this counter.

The breakout level of Rs 380 will act as an immediate support level while Rs 365-355 is a major demand zone. MACD (moving average convergence and divergence) and RSI (relative strength index) are supporting the breakout while ADX (average directional index) still needs to cross the 25 mark to generate strength in the new trend.

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Star Health & Allied Insurance Company: Buy | LTP: Rs 701 | Stop-Loss: Rs 600 | Target: Rs 850 | Return: 21 percent

The counter has bottomed out with a V-shape recovery and now it is likely to form a bullish Inverse Head and Shoulder formation in recent pullback as Rs 660-640 is a strong demand zone.

The neckline resistance is placed at Rs 760 level; above this, we can expect a move towards Rs 850-900 levels. MACD is trading above the centerline whereas RSI is holding above the 50 mark.

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Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Pravesh Gour is the Senior Technical Analyst at Swastika Investmart.