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Last Updated : Jan 17, 2020 12:13 PM IST | Source: Moneycontrol.com

Hot Stocks | Three stocks that can give up to 12% return in a month

Nifty registered a new lifetime high of 12,389 during the week and has been trading with a gain of around 0.81 percent.

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Mehul Kothari

This week belonged to the bulls as the domestic market remained flat to positive during most of the sessions with a positive price action in individual stocks.

Close

Nifty registered a new lifetime high of 12,389 during the week and has been trading with a gain of around 0.81 percent.

The Nifty Bank index has been an underperformer since it is trading way lower than its lifetime high and has lost around a percent so far during the week.

Until last week, we were of the opinion that until Nifty sustains above the 12,050-mark, there is a possibility of higher levels like 12,300–12,450.

Now, the index has almost tested 12,400-mark. Going ahead, a move above 12,400 could extend the rally towards 12,500.

But on the upside, 12,400–12,500 could be a supply zone since that is the placement of a rising trend line.

Looking at the broader picture, we would like to draw the participants’ attention to an important observation that the weekly and monthly RSI of Nifty is witnessing a negative divergence.

As per this observation, one should keep booking profits at higher levels. On the downside, major support is at 12,200. A breach of this level might apply immediate breaks to the ongoing momentum.

We feel this could be a final leg of the upward move and a wiser strategy ahead of the Budget could be to book longs in the final week of January 2020.

Here are three buy calls for the next 3-4 weeks:

Indian Bank | Buy | LTP: Rs 102.30 | Target: Rs 114 | Stop loss: Rs 96 | Upside: 11.44%

Indian Bank has been in a corrective mode since June 2019 and has come down from the peak of Rs 292 to Rs 100-odd levels.

Thus, it has been trading in an oversold zone on the larger degree charts.

At this juncture, the stock has found support near Rs 95, which is the placement of the long-term rising trend line.

On the monthly chart, the RSI oscillator is displaying a hidden divergence, which indicates the possibility of a bounce.

Phillips Carbon Black | Buy | LTP: Rs 136.60 | Target: Rs 152 | Stop loss: Rs 127 | Upside: 11.27%

Since October 2019, Philip Carbon has made several attempts to clear the hurdle of Rs 130 on a closing basis but failed each time.

In the previous session, the stock confirmed this breakout on a closing basis and that too, with extraordinary volumes.

In the process, the stock has managed to close above its 200-day simple moving average, which is a sign of strength. In addition, a close at this level in the coming session would confirm a weekly close above the 200-week simple moving average, which will be an icing on the cake.

Sadbhav Engineering | Buy | LTP: Rs 129.05 | Target: Rs 144 | Stop loss: Rs 122 | Upside: 11.58%

Over the past few sessions, this stock has been trading in a narrow range of Rs 130–120 with normal volumes.

In the previous session, the stock managed to break out from this range with considerable volumes.

The price action is accompanied by a range breakout in the daily RSI, which adds more weight to the bullish outlook.

(The author is a 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 Jan 17, 2020 09:14 am
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