There are multiple confirmations that the Nifty might have formed a very short-term top just above 12000, and support are seen near 11,740.
The Indian benchmark index stalled near 12,000 levels as profit booking intensified at higher levels. The Nifty50 has created an ‘Evening Star’ kind of candlestick pattern on November 8 on the weekly charts which is a bearish pattern.
The trendline from the lows of September and October has been breached as the Nifty closed below the said trendline. On the downside, the level of 11,740 will act as a major support zone and, on the higher side, 12,000-12,040 may work as resistance.
The Nifty50 just closed at the 20-day weighted moving average which is currently placed at 11,838. There are multiple confirmations that the Nifty might have formed a very short-term top just above 12,000, and support is seen near 11,740.
Here is a list of top three stocks which could give 10-19 percent return in the next three-four weeks:
Godfrey Phillips: BUY | LTP: Rs 1,249 | Target: Rs 1,440 | Stop Loss: Rs 1,136 | Upside 15.21 percent
Godfrey Phillips has given a breakout from the downward sloping channel of Rs 750 points. It has also ended four years of consolidation.
The breakout is for the longer term, which could take the stock towards life highs. But, in the shorter-term, one can expect a target of Rs 1,440. The stock managed to close above all the important moving averages on Wednesday.
Traders can accumulate the stock on dips in the range of Rs 1,210-1,245 for the target of Rs 1,440, and a stop loss can be placed below Rs 1,136 on a daily closing basis.
Tinplate Company Ltd: Buy in range of Rs 128-136 | LTP: Rs 136.50 | Target: Rs 163 |Stop Loss: Rs 120 | Upside 19.8 percent
After a prolonged correction, Tinplate has witnessed a breakout from the downward sloping channel placed at Rs 126. The higher high higher low formation is in place which is a positive sign.
This is a longer-term breakout which gives a higher side target around Rs 256. But, in the short term, one should expect a target of Rs 163.
The stock is also trading above all major moving averages and all of them are slopping upwards. One can even implement buy on every dip strategy. Traders can accumulate the stock on dips in the range of Rs 128-136 for a target of Rs 163, and a stop loss can be placed below Rs 120 on a daily closing basis.
Axis Bank: Sell in the range of Rs 712-725 | LTP: Rs 711 | Target: Rs 640 | Stop Loss Rs 741 | Upside 10 percent
Axis Bank has completed the retracement of 61.80 percent of the last fall. At the same time, the trendline from lows of September and October has broken, and the stock is now trading below 20-day EMA.
This move is well supported by indicators like RSI and stochastic. So, the downtrend in Axis Bank is getting continued. And, in the short term, the stock could retest lows of October.
Traders can sell the stock in the range of Rs 712-725 for the target of Rs 640, and a stop loss could be placed above Rs 741 on a closing basis.
(The author is Technical Analyst, Bonanza Portfolio Ltd)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.Are you happy with your current monthly income? Do you know you can double it without working extra hours or asking for a raise? Rahul Shah, one of the India's leading expert on wealth building, has created a strategy which makes it possible... in just a short few years. You can know his secrets in his FREE video series airing between 12th to 17th December. You can reserve your free seat here.