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Last Updated : Jul 09, 2020 07:00 AM IST | Source: Moneycontrol.com

Hot Stocks | M&M Financial Services, Westlife Development , Axis Bank can give up to 17% return in short term

The higher high higher bottom formation is nicely poised on the daily timeframe. Due to a further rise in the index, its major technical parameters remain in favour of the bulls.

Moneycontrol Contributor @moneycontrolcom
 
 
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Rohan Patil

The Nifty, on July 8, opened with marginal gains and traded in a narrow range and in the last hour, it gave a negative breakdown of a consolidation range on a smaller timeframe.

As we have witnessed a significant spike in the Nifty, some profit-booking ahead of weekly expiry was expected.

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The higher high higher bottom formation is nicely poised on the daily timeframe. Due to a further rise in the index, its major technical parameters remain in favour of the bulls.

On the options front, maximum Put OI is at 10,000 followed by 9,500 strikes, while maximum Call OI is at 11,500 followed by 11,000 strikes.

We have seen call writing at 11,200 then 11,300 strikes while put writing is seen at 10,500 then 10,700 strikes.

The options data suggests an immediate trading range between 10,400 and 11,050.

A couple of weeks ago, the Bank Nifty created a whipsaw after witnessing breakout on the daily timeframe.

After a breakout, the banking index formed a bearish engulfing candlestick pattern that drifted prices below the consolidation range.

Instead of trading lower, the Bank Nifty firmly held support near its 21 and 50-day exponential moving averages placed near 21,000 level on the daily chart.

Technically, the Bank Nifty is likely to outperform the Nifty in the coming sessions as it has witnessed a breakout of a consolidation range and has neglected its previous bearish candlestick pattern.

Immediate support for the Nifty is near the 10,400 -10,300 zone and resistance is near the 11,000-11,200 zone. Support for the Nifty Bank is near the 21,200–21,000 zone and resistance the 23,300-23,500 zone.

Here are three buy recommendations for the next 3-4 weeks:

Mahindra & Mahindra Financial Services | Buy | LTP: Rs 201 | Target price: Rs 235 | Stop loss: Rs 180 | Upside: 17%

On July 7, the stock finally managed to surpass multiple resistance zones around Rs 190–195, which eventually confirmed a horizontal trendline breakout.

The recent leg of strong up-move is also supported by strong volumes and it also resembles a strong consolidation breakout.

Prices are trading above their exponential moving averages (21 and 50) on the daily chart.

The momentum oscillator RSI (14) is reading above 60 levels with positive crossover, which is positive for the index.

The MACD indicator is reading above its line of polarity with positive sentiments.

Traders can accumulate the stock in the Rs 200–203.50 range.

Westlife Development | Buy | LTP: Rs 330.90 | Target price: Rs 365 | Stop loss: Rs 310 | Upside: 10%

The stock has completed a rounding bottom pattern and witnessed a breakout above its trendline resistance on July 7 on the daily timeframe.

At the current juncture, the stock has given a fresh breakout above its 100-day exponential moving average on the daily interval along with marginally higher volumes.

The majority of indicators and oscillators are showing a positive trend. Prices have sustained above all their major simple moving averages. Traders can accumulate the stock in the Rs 330-333 range.

Axis Bank | Buy | LTP: Rs 444 | Target price: Rs 500 | Stop loss: Rs 410 | Upside: 13%

The stock, on the daily chart, has witnessed a breakout of a triangle pattern and looks positively poised to trade higher.

This week, the stock has given a fresh breakout above the consolidation zone along with marginally higher volumes, which suggest next up-swing in the prices.

The key technical indicators on the near-term timeframe are in buy mode. The stock has the potential to continue the current up-move and will test higher levels.

Prices are trading above their exponential moving averages (21 and 50) on the daily chart. Traders can accumulate the stock in the Rs 441-447 range.

(The author is Technical Analyst at Bonanza Portfolio)

Disclaimer: The views and investment tips expressed by 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.
First Published on Jul 9, 2020 07:00 am
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