India VIX closed at 20.15 levels - a 30-month high for the index. Thus, volatility in the market is likely to continue.
After the last three days of decline, the Nifty index managed to close in the positive on October 8. The Nifty finally closed at 10,348 levels up by 0.31 percent for the day. The BSE Mid-Cap and Small-Cap index were down 2 percent each for the day.
The market breadth on NSE was negative with almost 1:3 in favour of declines. The intraday wild swings saw the index testing 10,200 levels twice during the day and closed at 10,348 levels to form bullish Hammer candlestick pattern for the day.
On the weekly chart, index has touched a rising support trend line originating from lows of 6,825 and 7,893 levels. Thus, crossing above 10,400 levels, a bounce back may be expected in the market towards 10,550-10,650 levels.
On the downside, a break below 10,200, could fuel further decline towards March low of 9,952 levels. In the Nifty options, the maximum open interest for Puts is seen at 10,000 followed by 10,500; while for Calls it is seen at 11,000 followed by 10,800.
Significant amount of Put writing was seen in 10,000, indicating support for the market is shifting lower. Call writing was seen in 10,400 and 10,500 strikes.
India VIX closed at 20.15 levels - a 30-month high for the index. Thus, volatility in the market is likely to continue and further rise will only add pressure to the markets whereas cooling off in volatility will help in market bouncing back.
Here is a list of top 5 stocks which could give 12-15% return in the next 1-2 months:
Repco Home Finance: Sell| CMP: Rs 378| Stop Loss: Rs 400| Target: Rs 320| Return 15%
The stock has been in a downtrend, forming lower tops and lower bottoms for more than a year now. The stock has seen a major multi-year topping out pattern between Rs 900 and Rs 500.
The breakdown from the pattern was on high volumes and the momentum indicates selling pressure in the stock.
The Average Directional Index (ADX) indicator of trend strength has moved above neutral level of 20 and Minus Directional Indicator (-DI) trending higher on weekly chart indicating strong downtrend.
Thus, the stock can be sold at the current level and on rise towards Rs 385 with a stop loss above Rs 400 and a target of Rs 320.
Jubilant Foodworks: Buy| CMP: Rs 1183| Stop Loss: Rs 1120| Target: Rs 1330| Return 12%
After touching an all-time high of Rs 1,578 in August this year, the stock has witnessed a decline to touch a low of Rs 1080 last week. The decline has been on below average volumes compared to the volumes on the up move.
The price has now retraced 38.2 percent (Rs 1120) Fibonacci retracement level of the major up move from Rs 380 to Rs 1578 levels. For the last two trading sessions, the stock has formed a Hammer type candlestick pattern with long lower shadows indicating buying at support levels.
Also, Monday’s bar has formed higher low than previous day. The Relative strength index (RSI) and Stochastic oscillators have given a positive crossover with respective averages on daily chart.
Thus, the stock can be bought at current level and on dips towards Rs 1,165 with a stop loss below Rs 1120 and a target of Rs 1330.
Voltas: Sell| CMP: Rs 479| Stop Loss: Rs 505| Target: Rs 420| Return 12%
The stock has been facing resistance at Rs 635—675 levels on the upside and it has given a breakout on the downside to close at 52-week low of Rs 479.
In Monday’s session, the price has broken its previous swing low of Rs 493. It formed a long bearish candlestick on above average volumes which indicates selling pressure in the stock.
The price has given a breakout from the Bollinger band with expansion of band and closed below the lower band indicating continuation of the trend in the direction of breakout on daily chart.
The MACD line on the weekly chart has given a crossover with its average and moved below the equilibrium level of zero. Thus, the stock can be sold at current levels and on rise to Rs 490 with a stop loss above Rs 505 and a target of Rs 420.
Piramal Enterprises: Sell| CMP: Rs 2109| Stop Loss: Rs 2200| Target: Rs 1900| Return 10%
The stock has been in a declining mode for the past one month from its all-time high of Rs 3308. The volumes has been above average with long bearish candlesticks which indicates selling pressure in the stock.
It saw a pause in decline around its previous lows of Rs 2275 levels. But, it has broken its crucial support level of Rs 2275 which was followed by further decline.
The MACD line on the weekly chart has given a negative crossover with its average and moved below equilibrium level of zero. Thus, the stock can be sold at current level and on rise towards Rs 2140 with a stop loss above Rs 2200 and a target of Rs 1900.
Petronet LNG: Buy| CMP: Rs 212| Stop Loss: Rs 200| Target: Rs 240| Return 13%
For the last two trading sessions, the stock has formed a Hammer candlestick pattern with long lower shadows indicating buying at support levels. Also, Monday’s bar has formed higher low than previous day.
Stochastic oscillators have given a positive crossover with respective averages on daily chart. Thus, the stock can be bought at current levels and on dips towards Rs 208 with a stop loss below Rs 200 and a target of Rs 240.(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)