Moneycontrol
Jan 01, 2018 09:40 AM IST | Source: Moneycontrol.com

Important for bulls to hold above 10500; 4 stocks which can give up to 11% return

Based on Fibonacci Retracement analysis, the prices are trading above all the levels and major support for the index is seen at 10,430 levels and crucial resistance at 10,552.

 
 
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Dinesh Rohira
5nance.com

The Indian equity market witnessed a volatile momentum during the last week’s trading session ahead of F&O expiry and outcome of SEBI’s review on regulation stance.

The Nifty index remained unbroken at bull’s palm and closed above its crucial level placed at 10,500 level after consolidating in the last two consecutive sessions.

The index formed a strong bullish candlestick pattern on its daily price chart after two successive dips and gave a positive cue on an uptrend for the next session.

Further, the momentum indicator suggests a strong support for the uptrend with the relative strength index (RSI) at 65 level coupled with MACD trading above its Signal-Line.

Based on Fibonacci Retracement analysis, the prices are trading above all the levels and major support for the index is seen at 10,430 levels and crucial resistance at 10,552.

It will be crucial for the index to trade above 10500 on a closing basis to keep the uptrend momentum going forward. Given an unlikely trigger in the upcoming session, the major event is expected to be Q3 earnings result.

The index is expected to trade on a rangebound level at 10600 on upside and 10455 on the downside. A dip below 10450 should be a good level to take a long position with a stop-loss below 10420.

Here is a list of top four stocks which can give up to 11% return in the short term:

Housing Development and Infrastructure Ltd. (HDIL): BUY| Target Rs73 | Stop-loss Rs56 | Return 11%

HDIL witnessed a healthy correction after hitting its 52-weeks high at 101 level and continued to consolidate near its crucial support level placed at Rs48-50 mark.

The scrip witnessed a strong reversal in uptrend from 48 level and closed several sessions on a positive trajectory and strong volume breakout in last week’s session.

On the daily price chart, the stock formed a strong bullish belt hold pattern after sliding marginally in the previous session coupled with a positive outlook on price trend-channel. Further, the momentum indicator turned positive with RSI at 55 level which is a favourable buy price regime.

Further, the scrip started to trade above its 50-days EMA level and is at the edge of trading above its 200-days EMA level.

The scrip the currently facing resistance from its 200-days EMA at 78 level and support level at 55. We have a BUY recommendation for HDIL which is currently trading at Rs. 65.55.

Prakash Industries Ltd: BUY| Target Rs213 | Stop-loss Rs182 | Return 9%

Prakash Industries witnessed a major volume breakout during the weekend session despite remaining flat during the initial trading day and managed to hit its 52-weeks high at 198 level but fail to sustain at that level.

However, the scrip managed to close with the higher peak with about 8 percent on an intraday basis.

The scrip formed a strong bullish candlestick pattern in its long-term price chart which is expected to favour the next leap.

Further, the secondary momentum indicator suggested a similar support for the scrip with price trading above all the level at current regime.

The MACD at 10.5 also suggests strong support for the rally with bullish crossover from its signal-line still intact.

The stock is currently facing a resistance level at 223 and support level at 174. We have a BUY recommendation for Prakash Industries which is currently trading at Rs. 195.80

Bhansali Engineering Polymers: BUY| Target Rs197 | Stop-loss Rs175 | Return 5%

Despite witnessing several consolidation instances after hitting a higher level, Bhansali Engineering rebounded back to higher level and continued with a strong uptrend momentum on its long-term chart with a healthy outlook. It also witnessed a similar growth in volume along with its upward movement.

On the daily price chart, the scrip continued to form a strong bullish candlestick pattern coupled with the new trend in its price channel, thus keeping a positive trajectory intact.

Further, the RSI at 66 level indicates a strong momentum support for the scrip coupled the bullish crossover just happening at the current level.

The stock is currently facing an immediate resistance at 199 and support level at 170. We have a BUY recommendation for Bhansali Engineering which is currently trading at Rs 187.95

Crompton Greaves Consumer Electricals Ltd: BUY| Target Rs289 | Stop-loss Rs275 |Return 5%

Crompton Greaves Consumer maintained a strong bullish rally on its long-term price chart despite facing a headwind at a certain level and decisively managed to trade on a positive trend line.

Further, it continued to support the uptrend momentum with significant volume growth at the same pace. On the daily price chart, the stock formed a “cup & handle” kind of pattern coupled with strong bullish belt hold pattern which is expected to support the current momentum after healthy correction in past session.

Further, the secondary trend indicator suggests a favourable buying price regime with RSI at 65 levels coupled with a bullish crossover on MACD.

The stock is currently facing resistance at 291 level and support level at 259. We have a BUY recommendation for Crompton Greaves which is currently trading at Rs. 275.50

Disclaimer: The author is Founder & CEO, 5nance.com. 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.
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