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Hot Stocks | 'ITC, Linde India, TVS Motor can give double-digit returns in short term'

Talking about overall mood in market, Vidnyan Sawant of GEPL Capital said the current trend in Nifty is rangebound between 15,930 and 15,367 but is negative-biased

July 01, 2022 / 07:38 AM IST
 
 
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Nifty seems to be in a correction mode on the monthly chart. Since October 2021, the index has been in a gradual downward move. On weekly chart, Nifty is forming lower high, lower low pattern, indicating negative undertone of the index.

By looking at daily charts, we observed that the level of 15,930 has acted as a strong resistance since last 4 days, which is in sync with the gap which occurred on June 13, 2022 around the zone of 16,172–15,886.

On the downside, Nifty has a strong support at 15,367 (swing low) and 15,183 (low of June 2022).

We feel that the current trend in Nifty is rangebound between 15,930 and 15,367 but is negative-biased. If the Nifty breaches below 15,367 level then it will further down till 15,183 level.

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

Close

Linde India: Buy | LTP: Rs 3,198 | Stop-Loss: Rs 2,651 | Target: Rs 4,200 | Return: 31 percent

On weekly chart of Linde India, we can spot that the overall trend of the stock is positive as it is maintaining higher top, higher bottom pattern since February 2021.

Prices have shown a bounce back from the level around Rs 2,945, which is 38.2 percent retracement of its prior advance from the level Rs 885 (February 2021) till Rs 4,186 (April 2022). Around the same level (Rs 2,945) we witnessed a breakout of rounding bottom pattern in the month of March 2022 for which prices took 24 weeks to form and also we identified change in polarity of prices around this level.

Prices have taken support from the trendline which has been respecting since February 2021 and have shown closing above its 5 weeks high. The uptrend is followed by high volumes.

On indicator front, relative strength index (RSI) is above 50 on multiple time frames i.e Daily, Weekly and Monthly, indicating bullish momentum.

Going ahead, we expect the prices to move at higher levels towards Rs 4,000, post which we might see a move towards Rs 4,200 levels.

We recommend a stop-loss of Rs 2,651 on daily closing basis.

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TVS Motor Company: Buy | LTP: Rs 842 | Stop-Loss: Rs 765 | Target: Rs 1,000 | Return: 19 percent

TVS Motor, on weekly chart, has shown a breakout from Cup & Handle pattern which has been forming since December 2017. The stock has also made fresh all-time high at Rs 850 in this week.

The stock has been forming bullish pattern of higher top higher bottom since last 7 weeks.

On the indicator front, the RSI plotted on higher time frames is above 50 mark and rising, which indicates bullish sentiment in the stock.

Going ahead, we might see the prices move higher towards Rs 1,000 mark. We recommend a strict stop-loss of Rs 765 on daily closing basis.

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ITC: Buy | LTP: Rs 273.5 | Stop-Loss: Rs 250 | Target: Rs 350 | Return: 28 percent

In ITC, on weekly chart, we witnessed that prices are forming higher high, higher low formation. Prices have shown a bounce back from 20 weeks simple moving average (SMA), which acted as a variable support for the prices.

Around level of Rs 258, we can spot change in the polarity by the prices.

On the indicator front, the RSI plotted on weekly time frame we can spot positive reversal by the prices around over bought zone (70 mark) and the RSI is sustaining above 50 levels, this indicates a bullish sentiment in the stock.

We expect the stock to move higher towards Rs 320 levels and if it managed to cross above Rs 320 then eventually it will move towards Rs 350 levels. One should maintain a strict stop-loss of Rs 250 on daily closing basis for this trade.

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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.
Vidnyan Sawant is the AVP Technical Research at GEPL Capital.
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