The market ended higher for the third successive week, amid volatility, thanks to favourable domestic cues. The Nifty maintained its positive stance and almost touched 11,500. However, marginal profit taking on Monday trimmed some of the gains. The banking index performed on expected lines, while other sectoral indices traded mixed.
In the near future, we may see some consolidation in the Nifty within the 11,250-11,525 range, but the bias would remain on the positive side.
Traders should continue with their buy on dips approach but remain cautious while selecting stocks. We reiterate our preference for private banking majors and expect IT counters to resume their uptrend, while media, auto and metal counters may remain under pressure.
Here is a list of top three stocks that could return 5-7 percent return in the next one month:
HCL Technologies: Buy | Target: Rs 1040| Stop loss: Rs 955 | Return: 5.58%
HCL Technologies has witnessed breakout today i.e. on August 13, supported with a decent rise in volume, after spending nearly three weeks in narrow consolidation range, closer to its support zone of short-term moving averages viz. 50,100 EMA on the daily chart.
Its chart pattern combined with confirmation indicators are in favor of fresh upward momentum. We advise creating fresh longs in the range of Rs 980-985. It closed at Rs 983 on August 13, 2018.
Kotak Mahindra Bank: Buy | Target: Rs 1350 | Stop loss: Rs 1,260 | Return: 4.65 %
Kotak Mahindra Bank has been seeing profit taking for last one month and retraced marginally from its record high. It has reached close to the support zone of 100 EMA on the daily chart of late and likely to rebound swiftly in near future.
Traders should utilise this phase and accumulate gradually in the range of Rs 1280-1290. It closed at Rs 1287.15 on August 3, 2018.
Reliance Infrastructure: Sell August Futures | Target: Rs 382 | Stop loss: Rs 428 | Return: 7.28 %
Reliance Infrastructure has been trading in a steady downtrend and holding below the resistance zone of long-term moving averages on multiple time frames.
It has rebounded from its 52-week low in last one month and trading closer to the resistance zone, offering fresh shorting opportunity.
We advocate shorting on any uptick in the mentioned range of Rs 412-416. It closed at Rs 408.90 on August 13, 2018.Disclaimer:
The author is President, Religare Broking. 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.