Ashish Chaturmohta
After two consecutive days of losses, the market got a breather as it closed in the green on September 18, with the Nifty50 settling at 10,841 up 0.21 percent.
The broader market indices, BSE Midcap and Smallcap, outperformed the benchmark gaining 0.39 percent and 0.30 percent ,respectively, on September 18.
The market breadth on the NSE was neutral with almost 1:1 ratio. For the last seven weeks, the index has been rangebound between 11,150 and 10,650 levels.
Hence, any breakout from this range needs to be seen for a sustainable move in either direction. On the upside, 11,150-11,200 is the resistance which needs to be taken out. While the immediate resistance seen at 11,000 levels.
On the downside, the immediate support is placed at 10,746, followed by 10,637. Now, a break below 10,637 levels will indicate a resumption of the downtrend in the market.
In Nifty September monthly expiry options, maximum open interest for Put is seen at strike price 10,800 followed by 10,6000 while for Call maximum open interest is seen at 11,000 followed by 11,200.
The Nifty Put-Call option distribution data is suggesting support at 10,650 levels and resistance at 11,200 levels. India VIX declined by 4.18 percent to close at 15.35 levels for the day.
India VIX needs to stay below 16 levels and move lower for the market to see a bounce back. However, VIX moving back above 16 will be a cause of concern for the market.
Here are three stocks which can return 10-15% in the next 1-3 months:
Pfizer Limited: Buy | LTP: Rs 3,309 | Stop Loss: Rs 3,150 | Target: Rs 3,800 | Upside 14 percent
The stock has fallen from the high of Rs 3,473 in July to a low of Rs 2,792 last month where it has taken support around the previous swing low.
Since then it has seen a strong rally to current levels which indicates buying momentum in the stock. Looking at the broader chart, it has witnessed a consolidation between Rs 3,473 and Rs 2,792 levels over the last six months.
The price has moved above its short and long-term averages. If the stock sustains at current levels, it is likely to see a breakout on the upside towards its all-time high of Rs 3,847.
MACD has given a positive crossover with its average and moved above the equilibrium level of zero on the weekly chart. Thus, the stock can be bought at current levels and on dips towards Rs 3,260 with a stop loss below Rs 3,150, and a target of Rs 3,800 levels.
Alkem Laboratories Ltd: Buy | LTP: Rs 1,896 | Stop Loss: Rs 1,820 | Target: Rs 2,100| Upside 10 percent
The stock hit an all-time high of Rs 2,469 in January 2018, and then corrected towards Rs 1,660 odd levels in July this year.
In the process, the stock corrected 61.8 percent Fibonacci retracement of the major rise from Rs 1,152 to Rs 2,469 which comes at Rs 1,655 levels.
Here, it has formed multiple lows indicating strong support level for the counter. At lower levels between Rs 1,840 and Rs 1,660, the stock witnessed consolidation but has now broken above that consolidation range.
The price has also given a breakout on the upside from Bollinger Band with the expansion of bands indicating a continuation of the trend in the direction of the breakout on the daily chart.
MACD line has moved above the equilibrium level of zero on weekly charts suggesting the trend to change on the upside. Thus, the stock can be bought at current levels and on dips towards Rs 1,875 with a stop loss below Rs 1,820, and a target of Rs 2,100 levels.
Dabur India Limited: Buy | LTP: Rs 460 | Stop Loss: Rs 440 | Target: Rs 525 | Upside 14 percent
After hitting an all-time high of Rs 490 in August last year, the stock declined towards Rs 360 odd levels in November last year. The subsequent bounce back from November faced resistance near Rs 464 and then corrected back towards Rs 360 levels.
Since then, the stock has been forming a higher top and higher bottom to rally back towards Rs 460. It has formed a double bottom pattern on the weekly charts with neckline seen at Rs 464 levels.
The Average Directional Index (ADX) line, an indicator of trend strength has moved above the equilibrium level of 20 with rising Plus Directional line on the daily chart.
Momentum indicators are in bullish mode on daily as well as on the weekly chart. Thus, the stock can be bought at current levels and on dips towards Rs 453 with a stop loss below Rs 440, and a target of Rs 525 levels.
Tata Global Beverages: Buy | LTP: Rs 260 | Stop Loss: Rs 247 | Target: Rs 300 | Upside 15 percent
The stock is in an uptrend forming higher tops and higher bottoms on the daily chart since February low of Rs 177. The recent correction from the high of Rs 282 has taken support around an 89-day exponential moving average.
On the daily chart, it has formed a bullish hammer candlestick pattern which suggests the selling might be over and the stock is likely to move higher from the current levels.
Stochastic has given positive crossover with its average on after moving above oversold levels. Thus, the stock can be bought at current levels and on dips towards Rs 255 with a stop loss below Rs 247, and a target of Rs 300 levels.
Polycab India Limited: Buy | LTP: Rs 633 | Stop Loss: Rs 605 | Target: Rs 710 | Upside 12 percent
The stock was in a downtrend after making a high of Rs 677 in May this year to touch a low of Rs 526 last month. Since then, the stock has rallied back to current levels and crossed 61.8 percent (620) Fibonacci retracement of the whole decline 667-526.
It has also crossed falling resistance trendline connecting highs of 677 and 655 indicating end of correction.
The Average Directional Index (ADX) line, an indicator of trend strength has moved above the equilibrium level of 20 with rising Plus Directional line on the daily chart.
Thus, the stock can be bought at current levels and on dips towards Rs 625 with a stop loss below Rs 605, and a target of Rs 710 levels.
(The author is Head of Technical and Derivatives, Sanctum Wealth Management)
Disclaimer: 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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