The Nifty has immediate support at 11,580 levels, holding above it, expect rally to continue towards 11,845 levels, says Ashish Chaturmohta of Sanctum Wealth Management.
Sanctum Wealth Management
The Nifty saw a flying start to the week on the back of positive global cues and added onto to its strength as the session progressed to hit new life-time high of 11700.95.
The index finally settled near the highs at 11,692-levels up by 1.17 percent for the day. The rally was led by large and mid-cap stocks as BSE Midcap and Smallcap indices gained 1.07 percent and 0.7 percent, respectively. Market breadth was slightly in favour of advances with ratio of 6:5 on BSE.
For the day, index formed long bullish candlestick maintaining its sequence of higher highs and high lows formation. Now index has immediate support at 11,580-levels, holding above it, expect rally to continue towards 11,845-levels. Above this, next level for market is seen at 12,000 levels. On downside, immediate support is seen at 11,580 levels breaking below which next support is seen at 11,500 levels.
In Nifty options, maximum open interest is seen at 11,500 followed by 11,600; while in Calls it is seen at 11,700. Significant amount of Put writing was seen 11,500, 11,600 and 11,700 indicating base is shifting higher; Call writing too shifted higher to strike price 11,700 and 11,800. Increasing Nifty Put/Call ratio and decrease in volatility is supportive for the market to head higher.
Here are the top 5 stock trading ideas which can give good returns of up to 18% in the near term:
Future Retail: Buy | CMP: Rs 548 | Stop loss: Rs 520 | Target: Rs 630 | Return: 15%
The stock had been in decline mode after hitting high of Rs 638 in the month of April this year. It hit a low of Rs 452 which is a strong support zone for the stock and seen smart recovery from the lows.
Yesterday, the price crossed the falling resistance trend line connecting highs of Rs 638 and Rs 574 levels. It was with a gap up opening and good volumes were high indicating buying participation in the stock. The price has closed above long term 200-day moving average which has been acting as resistance on last attempt.
Relative strength index has moved to 59 level, highest level in almost in four months since the April high suggesting momentum is picking up. Thus, stock can be bought at current level and on dips to Rs 540 with stop loss below Rs 520 for target of Rs 630.
Tasty Bite Eatables: Buy | CMP: Rs 8963 | Stop loss: Rs 8550 | Target: Rs 10,000-10600 | Return: 18%
The stock is in long term uptrend forming tops and higher bottoms on weekly chart and monthly chart. It hit all-time high of Rs 11100 levels in the month of January 2018 and then corrected to Rs 7000 odd levels in March. After bounce back to Rs 9500 odd levels stock again retested low of Rs 7000 and rallied back to current level.
It has formed double bottom pattern on weekly chart and trading below neckline i.e. breakout level. The price has given breakout above upper Bollinger band suggesting trend is likely to continue higher.
Weekly MACD line has seen reversal around equilibrium level and rising, indicating long term change in trend; on daily chart given positive crossover with its average. Thus, stock can be bought at current level and on dips to Rs 8800 with stop loss below Rs 8550 for target of Rs 10000-10600 levels.
Axis Bank: Buy | CMP: Rs 650 | Stop loss: Rs 620 | Target: Rs 750 | Return: 15%
The stock had been consolidating between Rs 655 and Rs 365 levels for more than three years with narrowing of range forming lower highs and higher lows. Thus, it has formed symmetrical triangle pattern on monthly chart. It completed five wave structure and current rally has crossed the falling resistance trendline i.e. breakout line this month.
Momentum has been strong indicated by long bullish candlesticks on weekly chart with good volumes. The stock has seen follow through action above breakout level confirming the breakout. On weekly chart, ADX line indicator of trend strength has moved above equilibrium level of 20 indicating strength in uptrend. Thus, stock can be bought at current level and on dips to Rs 642 with stop loss below Rs 620 for target of Rs 750 levels.
Voltas: Buy | CMP: Rs 624 | Stop loss: Rs 600 | Target: Rs 700 | Return: 12%
The stock has seen bottoming formation between 560 and 500 odd levels and rallied to current levels. Stock is seeing pole and flag/pennant formation on the up move indicating strong uptrend. Price has moved above long term 200 day moving average and holding above it. For the last couple of weeks stock has been consolidating in a narrow range above the average which is likely to see breakout on the upside. MACD line on weekly chart has moved above equilibrium level of zero. Thus, stock can be bought at current levels and on dips to 615 with stop loss below 600 for target of 700 levels.
Shree Cements: Buy | CMP: Rs 18559 | Stop loss: Rs 17700 | Target: Rs 20500 | Return: 10%
The stock has seen consolidation at lower levels between Rs 17600 and Rs 15400 levels. Last week, it witnessed breakout with strong momentum and good volumes. The stock has seen sharp rally from 200-day moving average after consolidating above it.
The price has given breakout from Bollinger band on upside with expansion of band on daily chart suggesting continuation of uptrend. Weekly MACD line has moved above neutral level of zero and moving higher.
Thus, stock can be bought at current level and on dips to Rs 18200 with stop loss below Rs 17700 for target of Rs 20500 levels.Disclaimer: The author is - Head Technical And Derivatives - Sanctum Wealth Management. The views and investment tips expressed by investment experts on moneycontrol.com/CNBC-TV18 are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.