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Last Updated : Feb 20, 2020 08:22 AM IST | Source: Moneycontrol.com

Hot Stocks: Nifty could trade in 12,000-12,300 range; 3 buys for the short term

On the downside, the immediate support is seen at 12,030 and then at 11,900 levels. A break below 11,900 levels will indicate a resumption of the downtrend and decline towards 11,750 levels.

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Ashish Chaturmohta

After four consecutive days of decline, the Nifty50 has seen a strong bounce back in Wednesday's session. The Nifty saw a gap-up opening and after a dip in early trade, it managed to close around days high.

Close

The Nifty50 was up by 1.11 percent to close at 12,126 levels. The broader market indices outperformed the benchmark with BSE Midcap and BSE Smallcap gaining 1.34 percent and 1.41 percent for the day.

Market breadth on NSE was positive with almost two stocks advancing against one decline. Tuesday’s bullish hammer candlestick has been seen follow-through action with a gap up opening to close near days high.

However, the congestion zone high of 12,272 prior to fall will act as resistance for the market. It needs to be crossed for markets to rally towards 12,500 levels.

On the downside, the immediate support is seen at 12,030 and then at 11,900 levels. A break below 11,900 levels will indicate a resumption of the downtrend and decline towards 11,750 levels.

In the Nifty February monthly expiry options, maximum open interest for Put is seen at strike price 12,000 and 11,800; while for Call maximum open interest is seen at 12,300 followed by 12,500.

Put writing was seen in immediate strike price 12,100 and 12,000 indicating supports shifting higher. Nifty options distribution is suggesting a range of 12,000-12,300 for the market.

India VIX closed at 14.02 down by 3.36 percent for the day. VIX has seen a bounce back after the last week’s volatility and crossing above 14.5 levels will keep the pressure on the market. However, sustaining below 14 levels will be supportive of equity markets.

Here is a list of top three stocks which could give 12-17% return in the next 1-3 months:

Jubilant FoodWorks: Buy| LTP: Rs 1,897| Stop Loss: Rs 1,830| Target: Rs 2,125| Upside 12%

The stock is in an uptrend as it is forming higher tops and high bottoms on the weekly chart since last August low of Rs 1,075.

Earlier in the month, the stock hit an all-time high of 1974 and then corrected down towards 1,800 odd levels.

Volumes on the decline were below historic average compared to up move indicating market participants are holding onto the stock.

The price has taken support at 21-Days Exponential Moving Average and then bounced back. Also, 38.2% Fibonacci retracement of the up move 1562-1974 comes at 1816 levels. Thus, indicating as good support level for the stock.

The Relative strength index (RSI) has given a positive crossover with its average on the daily chart indicating a change of the trend towards the upside.

Thus, the stock can be bought at current levels and on dips towards Rs 1,875, and a stop loss can be placed below Rs 1830 for the target of Rs 2125 levels.

Westlife Development: Buy| LTP: Rs 486| Stop Loss: Rs 460| Target: Rs 570| Upside 17%

The stock has seen a major multi-year consolidation between 450 and 160 odd levels on the long-term chart. It witnessed a breakout on the upside at the start of the month on high volumes and hit an all-time high of 499.

Since then it has consolidated above the breakout level between 486-445 levels before the next leg of the up move. After Tuesday’s session, the up move in the stock is indicating the start of a fresh uptrend.

The Relative strength index and Stochastic have given a positive crossover with their respective averages on the daily chart.

The Average Directional Index (ADX) line, an indicator of trend strength has moved above the equilibrium level of 20 with rising Plus Directional line on the monthly chart.

Thus, the stock can be bought at current levels and on dips towards Rs 476 with a stop loss below Rs 460 for a target of Rs 570 levels.

Voltas: Buy| LTP: Rs 733| Stop Loss: Rs 700| Target: Rs 840| Upside 14%

The stock has formed a major rounding bottom pattern between 675 and 500 odd levels over the 21-months period. It witnessed a breakout in late September last year and since then it has been consolidating above the breakout level.

After Wednesday’s strong up move with long body bullish candle and high volumes, it is indicating the start of a fresh uptrend after consolidation.

The stock has hit a new all-time high of 737 on Wednesday. The price has given a breakout on the upside from the Bollinger Band. MACD has given positive crossover with its average and moved above the equilibrium level of zero on a daily chart.

Thus, the stock can be bought at current levels and on dips towards 720 with a stop loss below 700, and a target of 840 levels.

(The author is Head of Technical and Derivatives, Sanctum Wealth Management)

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 Feb 20, 2020 08:22 am
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