“If the Nifty holds above 11,425, it is likely to rally towards 11,580-11,660 levels,” says Ashish Chaturmohta of Sanctum Wealth Management
Sanctum Wealth Management
The Nifty touched a new high at 11,495 in opening trade on Thursday but settled at 11,471 levels, up 0.2 percent for the day. The index has formed a small bodied candlestick for the day, suggesting indecisiveness among bulls as well as bears.
The Nifty continues to be in an uptrend as it makes higher highs and higher lows. The market breadth has improved in the last three weeks, with BSE midcap and smallcap indices showing strength.
We expect the broader markets to continue to do well. The Nifty has immediate support at 11,425. If the index holds above this level, it is likely to rally towards 11,580-11,660 levels.
On the downside, a break below 11,425 could take the index towards its next support placed at 11,350. But the major support for the market is now placed at 11,200.
In Nifty options, the highest put open interest is seen at 11,000, followed by 11,400 and 11,300 strikes, which suggest supports are shifting higher. India VIX, at 12.68, has seen a reversal from the major support level of 12. A crossover above 13.5 could dampen the rally.
Here is a list of top five stocks that could return 14-20 percent in 1-2 months:
Axis Bank: Buy | CMP: Rs 621 | Stop loss: Rs 580 | Target: Rs 750 | Return: 20%
The stock has been consolidating in the range starting from Rs 655 and Rs 365 levels for more than three years. It has formed a Symmetrical Triangle pattern on the monthly charts.
It has also completed five wave structure and the current rally crossed the falling resistance trendline i.e. breakout line.
In the last couple of weeks, the stock has seen a strong rally backed by high volumes indicating buying participation in the stock.
The price has also given a breakout from the Bollinger band on the upside with the expansion of band on daily as well as on weekly charts indicating that the stock is likely to rally from current level.
The weekly MACD line gave a positive crossover with its average and moved above the equilibrium level. Thus, the stock can be bought at current levels and on dips towards Rs 615 with a stop loss below Rs 580 and a target of Rs 750 levels.
Intellect Design Arena: Buy | CMP: Rs 253 | Stop loss: Rs 237 | Target: Rs 300 | Return: 18%
On the long-term monthly chart, the stock is seeing major rounding base formation between Rs 278 and Rs 96 levels for almost three years. Coming to the lower time frame, the stock has seen a breakout from sideways consolidation between Rs 227 and Rs 170 odd levels.
In the last three sessions, the stock has seen a strong rally with huge volumes which indicates buying momentum in the stock. It has crossed and closed above the resistance zone of Rs 226-232 levels.
Strong momentum and the overall chart structure suggests that the stock is likely to cross its all-time high of Rs 278. Thus, the stock can be bought at current level and on dips towards Rs 246 with a stop loss below Rs 237 and a target of Rs 300 levels.
Kansai Nerolac Paints: Buy | CMP: Rs 515 | Stop loss: Rs 490 | Target: Rs 600 | Return: 16%
The stock hit an all-time high of Rs 614 in the month December last year and then declined towards Rs 465. Over the period, the stock has seen multiple lows being formed in the region of Rs 465 and Rs 435 levels indicating a strong support area for the stock.
On the daily chart, the price has formed a bullish inverted head and shoulders pattern over the last three months. Recent rally from low of Rs 472 has been on the back of high volumes and strong momentum indicates strong buying participation in the stock.
In the process, the stock has given a breakout from the pattern. The price also has given a breakout from the Bollinger band on the upside. Expansion of bands on the daily chart suggests a continuation of the rally.
Daily MACD line given positive crossover with its average moved above equilibrium level. Thus, the stock can be bought at current level and on dips to Rs 505 with a stop loss below Rs 490 and a target of Rs 600 levels.
Phillips Carbon Black: Buy | CMP: Rs 279 | Stop loss: Rs 265 | Target: Rs 320 | Return: 14%
The stock has been in a long-term uptrend as it was forming higher tops and higher bottoms on the weekly and monthly chart. It hit an all-time high of Rs 319 in January this year and then saw major correction towards Rs 188 levels.
Since then the stock has seen consolidation between Rs 275 and Rs 188 levels to form a double bottom pattern on the weekly chart.
In the last couple of weeks, the stock has rallied with a bullish long candlestick formation and high volumes which indicates buying participation from lower levels.
The price has given a breakout above the neckline in Thursday’s session. Weekly MACD has given a positive crossover with its average after turning up from equilibrium level confirming the breakout on the upside.
Thus, the stock can be bought at current level and on dips towards Rs 275 with a stop loss below Rs 265 and a target of Rs 320 levels.
Deepak Nitrite: Buy | CMP: Rs 281 | Stop loss: Rs 265 | Target: Rs 330 | Return: 17%
After hitting high of Rs 298 in January this year, the stock has been consolidating between Rs 280 and Rs 215 levels for the past seven months. The price has seen a strong momentum and high volumes this week which indicates participation from lower levels.
It has now closed at a breakout level. The price has also given a breakout from Bollinger band on the upside with the expansion of band on daily as well as the weekly chart indicates that the stock is likely to rally from current level.
The stock can be bought at current level and on dips to Rs 275 with a stop loss below Rs 265 and a target of Rs 330 levels.Disclaimer: The author is Head of Technical and Derivatives at 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.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.