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Hot Stocks | Here's why Siemens, Divi's Labs can give up to 17% return in short term

The Bank Nifty index has been a laggard in the current upmove and may outperform the broader markets with key potential targets of 23,800-24,100 levels over the next few weeks.

July 10, 2020 / 07:04 IST
     
     
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    Vikas Jain

    The Nifty continued its positive stance and closed at 10,813 on July 9, near the 200-day average and gaining 5.3 percent from the last expiry.

    We continue to remain positive with a higher target of 11,050-11,100 levels where one can witness strong resistance, as it is a zone where long-term averages collide.

    The Nifty 11,000 CE also witnessed a rise in open interest, both in the next week and monthly expiry levels, which indicate the upper band for the current expiry.

    The Bank Nifty index has been a laggard in the current upmove and it may outperform the broader markets with key potential targets of 23,800-24,100 levels over the next few weeks.

    The first-quarter results have started and we expect the earnings reaction after the management commentary in individual stocks and expect markets to trade in a broad range of 10,550-11,000 over the next few weeks.

    The previous resistance of 10,550 will act as strong support from the current levels.

    We believe one should focus more on earnings trend now and allocate more money to sectors where earnings visibility is high, debt is lower and stocks valuations are trading below the long-term averages.

    Here are three trading ideas for the next 3-4 weeks:

    Siemens | Buy | LTP: Rs 1,147 | Target price: Rs 1,340 | Stop loss: Rs 1,015 | Upside: 17%

    The stock remained sideways after a sharp decline and the key technical indicators on the short-term timeframe have reversed from the oversold zone, giving a buy signal.

    On the lower side, its prior low connecting support line and its 100-month SMA worked as a key reversal point.

    We believe the stock will utilise prior consolidation and will resume its up-move towards Rs 1,340.

    Divi's Laboratories | Buy | LTP: Rs 2,176 | Target price: Rs 2,410 | Stop loss: Rs 2,020 | Upside: 11%

    The stock has completed its one-month corrective phase, both price-wise and time-wise, trading sideways to positive over the last few days.

    On the lower side, the stock has witnessed large volumes with positive price pullbacks and we believe it will again resume its uptrend

    The RSI is cutting upwards from down and the sector in positive momentum confirms an upmove from the current levels.

    ACC | Sell | LTP: Rs 1,325.90 | Target price: Rs 1,180 | Stop loss: Rs 1,430 | Downside: 11%

    We believe its long-term moving average (100-month SMA) will cap the upmove and later the stock will reverse down.

    Its key technical indicator on the short-term timeframe reversed from overbought zone and is now on the verge of reversal which could bring the stock towards Rs 1,180.

    Any jump above the Rs 1,430-mark will negate the down move in the stock.

    (The author is Senior Research Analyst at Reliance Securities)

    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.

    Moneycontrol Contributor
    Moneycontrol Contributor
    first published: Jul 10, 2020 07:04 am

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