India Cements among top buys that could give 8-18% return

Abhishek Mondal

Indian equity benchmarks traded in fine fettle throughout the day on Tuesday. After a cautious start, the Nifty traded lackluster throughout the session and managed to close almost flat at 10,769.15, up by 0.06 percent, amidst feeble global cues ahead of F&O expiry due on June 28.

The Nifty50 is stuck in a broader range between 10,700 and 10,834-levels since last nine trading sessions and is expected to face immediate support around 10,698 (23.6 percent retracement of May 24 to June 13 up move) and 10,684 (20 EMA) levels and is likely to find immediate resistance at around 10,834 in daily scales.

Moreover, if Nifty manages to breach 10,834 levels on the upper side on a closing basis, it will shift towards 10,890 to 10,930 levels.

The Relative Strength Index, or RSI, on the Daily Chart is at 53.23. It has continued to remain neutral showing no divergence against the price and MACD traded below the signal line, which indicates that the bias could remain sideways in the short term.

On the Options front, maximum Call open interest of 53.62 lakh contracts is seen at strike price 11,000, followed by 10,800, which now holds 41.76 lakh contracts and maximum Put open interest of 52.37 lakh contracts is seen at strike price 10,700, followed by 10,600 which now holds 40.58 lakh contracts.

As per the options data, immediate support is seen around 10,700 and 10,600-mark whereas 10,800 and 11,000 will act as a hurdle before June expiry.

India VIX closed higher by 1.71 percent at 12.79. An increase in VIX suggests limited upside and a consolidated down move in the market.

Here is a list of two ideas which could give 8-18% return in the next 1-2 months:

Bharat Financial Inclusion: BUY | Close: Rs 1199.40 | Target: Rs 1300 | Stop loss: Rs 1150 |Return: 8.39%

After making a short consolidation, the stock has given a breakout above Rs 1195-1196 levels on Tuesday with higher volumes.

The Daily Relative strength index (RSI) showing upward momentum and MACD is trading above zero line with positive crossover whereas (+) DI trading above (-) DI, which indicates that the stock has the potential to move higher.

Traders can buy the stock at current level around Rs 1199 with a stop loss below Rs 1150 (closing) for the target of Rs 1300.

India Cements: BUY | Close: Rs 113.15 | Target: Rs 134 | Stop loss: Rs 100 | Return: 18.43%

The stock has formed a bullish engulfing pattern on last Friday in daily scale with higher volumes, which is a bullish reversal by nature. Daily Relative Strength index (RSI) trading at 38.70; forming positive divergence against price and MACD trading below zero line with positive crossover, so we expect a sharp bounce in the counter.

Traders can buy the stock at around current levels and add on dips around Rs 109-110 with a stop loss below Rs 100 (closing) for the target of Rs 140.

Disclaimer: The author is Research Analyst, Guiness Securities. 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.