A stable move above 12,000 levels will invalidate resistance and it will strengthen the index to record new life-time-high till 12,300 odd levels.
Traders’ community looked disappointed since last Friday after the Reserve Bank of India (RBI) maintained a “status quo” on the repo rate.
Since the start of this week steep correction was witnessed but it was a bit unexpected for us. Considering the fact that the outcome from the policy was not on the expected note, such a reaction was expected.
Benchmark index on December 11 traded in a narrow range through the day but sudden spike in the last half-an-hour session stretched Nifty to close above 11900 mark and form Bullish Harami candlestick pattern.
The Nifty50 has completed a smaller degree Bullish AB =CD Harmonic pattern on the daily timeline which is well supported with the Fibonacci ratio.
The index formed a Bearish Engulfing Pattern in the previous week which is still valid and the index is trading well below the said pattern.
The NiftyBank has found support near its upward rising trendline connecting to the lows of 19 Sept and 7th Oct. Private Banks are likely to outperform state-run banks in the current scenario.
At the current junction, Nifty is stuck between 21 & 50 EMA on the daily chart which is bounded with 11,950 and 11,800 levels.
In case of any decline, the index will continue to find support around 11,850 – 11,700 levels, which coincides with horizontal trendline supports and will act as a line of polarity (resistance will act as support).
However, a stable move above 12,000 levels will invalidate resistance and it will strengthen the index to record new life-time-high till 12,300 odd levels.
Here is a list of top three stocks which could give 7-8% return in the next 3-4 weeks:
Divis Laboratories: Buy| LTP: Rs 1,819.60 | Target Rs 1,960 |Stop Loss: Rs 1,746|Upside 7.75%
After consolidating in a broad range of Rs 1750 – 1500, prices have witnessed a breakout above its “Rectangle Pattern” on the weekly timeline.
In the previous week, the broader market witnessed profit booking but this counter gave a bullish breakout with above-average volume, which indicates optimism towards the prices.
Prices are currently trading above all its major exponential averages (50, 100, and 200). On Momentum Oscillator RSI (14) it has given a breakout of downward slanting trendline on the weekly chart with positive crossover and currently reading above 60 levels.
Traders can accumulate the stock in the range of Rs 1,810 - 1,830 for the target of Rs 1960, and a stop loss can be placed below Rs 1,746 on a daily closing basis.
Phoenix Mills: Buy| LTP: Rs 762.65 | Target: Rs 830|Stop Loss: Rs 720|Upside 8.92%
Since October 2018 Phoenix Ltd is trading in a rising channel pattern on the weekly chart and has been moving consistently in a higher high higher low formation.
Prices are sailing above its 50 & 100 exponential moving averages on the weekly interval. The Momentum Oscillator RSI (14) has given a breakout from the ascending triangle pattern on the weekly chart with positive crossover and is currently reading above 60 levels.
Traders can accumulate the stock in the range of Rs 758 - 766 for the target of Rs 830, and a stop loss can be placed below Rs 720 on a daily closing basis.
Havells India: Sell| LTP: Rs 635.45 | Target: Rs 585 |Stop Loss: Rs 665| Downside 8%
Havells on the weekly chart recorded a breakdown from its three-year-long upward rising trendline around Rs 650 odd levels. Prices are consistently trading below its 50-Week exponential moving average, which is negative for the prices.
The 50-Days EMA is acting as strong resistance at the current junction and a break above this level will change the intermediate trade for the counter.
MACD indicator has settled below zero level with negative crossover shows further weakness to follow. Furthermore, prices are trading in lower high formation since June 2019.
The stock may be sold in the range of Rs 638- 632 for the target of Rs 585, and keep a stop loss above Rs 665.
(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.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.