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Last Updated : Dec 04, 2019 08:20 AM IST | Source: Moneycontrol.com

Hot Stocks: Remain stock specific as Nifty may see further decline on profit booking

We maintain our bullish stance intact and advise traders to use these dips to create fresh longs.

Moneycontrol Contributor @moneycontrolcom
 
 
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Shitij Gandhi

The Nifty index felt pressure around record highs and slipped back well below 12,000 mark again, as traders locked profits at higher levels before the Reserve Bank's monetary policy due on December 5.

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On the derivatives front, call writers were seen active in 12,100 strikes and added hefty open interest (OI) while on the other hand, put writers were seen shedding OI which points towards limited upside into the prices moving forward.

From the technical front, negative divergences on secondary oscillators on a shorter time frame suggest further downside possibility in the coming week on the back of further profit booking.

However, on broader charts, both the indices i.e. the Nifty and Bank Nifty are trading in a rising channel with the formation of a higher high and higher bottom pattern.

We maintain our bullish stance and advise traders to use these dips to create fresh longs.

Here is a list of top three stocks which could give 11-12 percent return in the next three to four weeks:

BEML: Buy| Target: Rs 1,145| Stop Loss: Rs 950| Upside 12%

The stock is consistently trading in a rising channel with the formation of a higher and higher bottom pattern on the daily and weekly interval charts.

At the current juncture, the stock has formed a rounding bottom pattern on the daily charts and gave a sharp upside above the key resistance level of Rs 1,000 levels.

The breakout has occurred with marginally higher volumes which suggest some more upside for the stock in the coming sessions. Traders can accumulate the stock in the range of Rs 1,020-1,025 for the upside target of Rs 1,145 levels, and keep a stop loss below Rs 950.

Gujarat Gas: Buy| Target: Rs 236| Stop Loss: Rs 195| Upside 12%

In the recent past, the stock gave a sharp breakout above 195 levels and then tested 210 levels in a short period. However, due to profit-booking, it retraced back to its breakout levels and took support there.

At the current juncture once again, fresh buying has emerged into the prices as stock managed to surpass above its recent hurdle levels of 210 along with higher volumes.

The positive divergences on the secondary oscillators suggest for much more upside into the prices moving forward as the stock is also continuously maintaining above its short and long term moving averages.

Traders can accumulate the stock in the range of Rs 210-214 for the upside target of Rs 236 levels, and keep a stop loss below Rs 195.

Balkrishna Industries: Buy| Target: Rs 1,011| Stop Loss: Rs 850| Upside 11%

After consolidating for more than four weeks, in a broader range of Rs 895 to Rs 830, the stock gave a sharp breakout this week above its 100-Days exponential moving average on the weekly interval.

The breakout happened with hefty volumes which suggest a long build-up into the prices. On the daily charts as well, the stock has been trading in a rising channel.

Traders can accumulate the stock in the range of Rs 910-918 levels for the upside target of Rs 1,011 levels, and a stop loss can be placed below Rs 850.

 

The author is Sr Technical Analyst at SMC Global 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 Dec 4, 2019 08:20 am
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