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Last Updated : Nov 29, 2019 07:07 PM IST | Source: Moneycontrol.com

Hot Stocks | Nifty may rise further; use this opportunity to book profits

Going ahead, it is better to remain stock-specific and go for stocks that have a fresh potential to rise rather than the ones that are overbought.

Moneycontrol Contributor @moneycontrolcom
 
 
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Mehul Kothari

After three weeks of consolidation, the market managed to confirm a breakout, and fortunately for the bulls, it’s on the higher side.

The Nifty spot broke out above 12,000 during the week to register a new lifetime high of 12,158. So far, the index is trading with a gain of around 2 percent this week.

Close

On the other hand, the Nifty Bank index too reached a new life high above 32,000 and is trading with a gain of more than 3 percent from its previous week’s close.

Above the 12,000-mark, we had a target of around 12,200 for the Nifty, which has almost been met. Now at this juncture, we are seeing that the index is hovering near the potential reversal zone of a bearish harmonic AB=CD pattern.

Also, on the larger degree chart, we can notice that there is a long-term rising trend line placed near the 12,400-mark, which is formed by joining the important tops of 6,357 and 11,760.

So, we continue to have a view that although the market might remain positive for some more time and the index could rise further, this opportunity should be used to start booking short-term profits in long positions in the coming weeks.

Another reason for this view is that there is a negative divergence in the weekly RSI of the Nifty spot, and this could trigger some consolidation or profit-booking.

Going ahead, it is better to remain stock-specific and go for stocks that have a fresh potential to rise rather than the ones that are overbought.

On the downside, 12,000 would now act as a sheet anchor for the market. A move below this level could start the corrective move sooner than expected.

Here is a list of top three stocks that could return 6-8 percent in the next 1-3 weeks:

Raymond: Buy | LTP: Rs 724 | Target: Rs 770 | Stop Loss: Rs 680 | Upside 6%

Recently, the stock rallied from Rs 575 to Rs 820 in a short span of time, and that was followed by a correction towards Rs 680.

The stock has been consolidating in the range of Rs 680–720 for the past few sessions. This area is the placement of the 200-day SMA.

Also, the stock filled an upside gap created near the Rs 700 mark on November 8, which indicates the beginning of a fresh upside. Even the reward-to-risk ratio looks lucrative to go long.

Page Industries: Buy | LTP: Rs 22,147.95 | Target: Rs 24,000 | Stop Loss: Rs 21,000 | Upside 8%

Similar to Raymond, the recent fall in Page Industries from Rs 26,000 to Rs 21,000 was just a pullback of its previous rally.

At this juncture, the stock is consolidating above its 200-day SMA. In October 2019, the stock rallied more than 20 percent from the same support zone.

The placement of the weekly RSI displays a breakout above the 50-mark and is again retesting, which can be a buying opportunity considering a small risk.

UltraTech Cement: Buy | LTP: Rs 4,299 | Target: Rs 4,570 | Stop Loss: Rs 4,150 | Upside 6%

For the past few sessions, we have been witnessing some traction in cement stocks.

With regard to UltraTech Cement, the stock underwent a breakout in the recent session from the falling trend line.

Along with the price, there is a breakout in the daily RSI, which indicates more strength. The price action has occurred just above the placement of the 200-day SMA, which adds more conviction for the long bets.

The larger degree trend remains very strong for the stock and the given technical rationale could be good enough for fresh longs.

(The author is Senior Technical Analyst, IndiaNivesh Securities)

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are his 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 Nov 29, 2019 08:04 am
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