Ashish Chaturmohta
The Nifty traded in a narrow range on Monday with a negative bias, following weak global cues, due to trade wars concerns between the US and China. The Nifty finally settled at 10,800, down 0.17 percent for the day.
Though the benchmark indices were flat to negative, broader markets were under pressure, as market breadth on the NSE was 2:1 in favour of declines.
The index has been facing resistance at the falling resistance trend line, connecting highs of 11,172-10,929 and trading below it. On the downside, it is seeing buying coming around 10,760 and holding above it.
For the last few sessions, it has been trading in a 10,760-10,835 range. For the uptrend to continue, the index needs to hold above 10,860 on a tradable basis, only then it can rally towards 10,929 levels and possibly higher to 11,000 levels.
On the downside, a break below 10,760 levels could see the index test 10,700 which is an important support. A break below 10,700 could see it decline towards 10,550 and resume the downtrend.
In Nifty options, maximum open interest for puts is seen at 10,700 followed by 10,600 which is likely to act as crucial support for the market. In calls, 11,000 strike has seen maximum OI.
Here is a list of five stocks that could return 11-15 percent in the short term:
Bata India: Buy | CMP: Rs 817 | Stop loss: Rs 780 | Target: Rs 930 | Return: 14%
After hitting an all-time high of Rs 833 in November last year, the stock has been in a consolidation mode. The stock took support at its 200-day moving average and then bounced back.
It has formed a bullish cup handle formation on the daily chart. The stock has seen a breakout from this pattern with strong momentum and high volumes in Monday’s session.
The price has also given a breakout from the Bollinger band as it closed above the upper band suggesting the start of a fresh uptrend in the direction of the breakout.
The daily MACD line has turned up from the neutral level of zero suggesting consolidation phase is over in the stock. Thus, the stock can be bought at current level and on dips to Rs 805 with a stop loss below Rs 780 and a target of Rs 930 levels.
Mahindra CIE Automotive: Buy| CMP: Rs 260 | Stop loss: Rs 245 | Target: Rs 300 | Return: 15%
The stock has been trading between levels of Rs 265 and Rs 205 odd levels for the last one year. The price is currently trading close to its breakout level and has given a breakout from Bollinger band with the expansion of band.
The ADX line indicator of trend strength on the daily chart has moved above the neutral level of 20 indicating uptrend is likely to sustain. The stock can be bought at current level and on dips towards Rs 255 with a stop loss below Rs 260 and a target of Rs 300 levels.
Persistent Systems: Buy | CMP: Rs 812 | Stop loss: Rs 780 | Target: Rs 910 | Return: 12%
The stock touched a high of Rs 878 in the month of February and then declined to hit a low of Rs 657 levels. The rally in the month of April has seen good volumes indicating buying participation.
The decline in the month April retraced 61.8 percent Fibonacci of the fall from Rs 868 to Rs 733 and seen a bounce back. The stock has formed a bullish inverted head and shoulders pattern on the daily chart.
For the last few sessions, the price has been trading in a narrow range before the next leg of up move could begin. Thus, the stock can be bought at current level and on dips towards Rs 800 with a stop loss below Rs 780 and a target of Rs 910 levels.
Torrent Pharmaceuticals: Buy | CMP: Rs 1,484 | Stop loss: Rs 1,430 | Target: 1,650 | Return: 11%
The stock has been trading in a range of Rs 1,700 and Rs 1,200 odd levels for the last couple of years. The price has seen a bounce back from the lower end of the range on multiple occasions indicating value area for the stock.
The stock is currently in the middle of the range and is now trading at a 52-week high. In the last three trading sessions, the stock has witnessed good volumes indicating buying participation.
The momentum indicators are in a bullish mode on the daily as well as on the weekly charts. Thus, the stock can be bought at current level and on dips towards Rs 1,470 with a stop loss below Rs 1,430 and a target of Rs 1,650 levels.
Mahindra & Mahindra: Buy | CMP: Rs 915 | Stop loss: Rs 880 | Target: Rs 1,020 | Return: 11%
On the long-term monthly chart, the stock has seen a multiyear consolidation between Rs 750 and Rs 550 odd levels since 2014. For the last few months, the stock has been in an uptrend forming higher tops and higher bottoms on daily charts.
After the breakout, the stock has hit an all-time high of Rs 934 couple of weeks back and has been trading in a narrow range since then.
It has formed a bullish pole and pennant continuation pattern on the daily chart. Thus, the stock can be bought at current level and on dips to Rs 905 with a stop loss below Rs 880 for a target of Rs 1,020 levels.
Disclaimer: The author is Head Technical and Derivatives, Sanctum Wealth Management. The views and investment tips expressed by investment expert 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.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
