If Nifty holds above 11,480, we expect the rally to continue towards 11,700-11,750 levels. On the downside, immediate support is seen at 11,480. A break below this level would see profit booking towards 11,340, says Ashish Chaturmohta of Sanctum Wealth Management.
Sanctum Wealth Management
The Nifty started the week on a strong note by hitting a fresh high of 11,565 on Monday and 11,581.75 on Tuesday. BSE Midcap outperformed benchmark indices, gaining 1.05 percent, while the BSE Smallcap lagged with a 0.14 percent gain on Monday.
On the daily chart, the Nifty has taken support from its rising trend line connecting the lows of 10,558 and 10,946 to cross the previous high of 11,495. It has formed a bullish candlestick pattern above the breakout level, which indicates that momentum is likely to continue.
The Nifty continues to maintain its sequence of higher highs and higher lows. If it holds above 11,480, we expect the rally to continue towards 11,700-11,750 levels. On the downside, immediate support is seen at 11,480. A break below this level would see profit booking towards 11,340.
In options, the highest open interest for puts is seen at 11,400 strike, followed by 11,300, which indicates supports are shifting higher. A significant amount of put writing is seen at 11,500. Call unwinding was witnessed in 11,400, 11,500 and 11,600 strikes, suggesting that market participants expect the index to move higher from current levels.
India VIX was down a percent at 13.03 levels. It has been easing from the recent high of 13.86 and resistance zone of 14-14.5 levels. A further decline will be supportive for the market.
Here is a list of top 5 stocks which could give 9-15% return in the next 1 month:
L&T Finance Holdings: Buy| CMP: Rs 187| Stop Loss: Rs 178| Target: Rs 210-215| Return: 15%
After hitting an all-time high of Rs 213.85 in the month of October 2017, stock witnessed correction down to Rs 145-140 levels. It has seen consolidation between Rs 186 and Rs 140 odd levels for nine months and formed a base.
After a strong rally from the bottom of the base to Rs 186 levels, the stock has been consolidating in a narrow range between Rs 186 and Rs 172 levels for last three weeks.
On Monday, the stock witnessed a breakout from the pattern with momentum and volumes indicating buying participation in the stock.
The daily MACD line has given positive crossover with its average and the weekly line has moved above equilibrium level of zero suggesting consolidation phase is over and resumption of the uptrend.
Thus, the stock can be bought at current level and on dips to Rs 183 with a stop loss below Rs 178 for a target of Rs 210-215 levels.
RBL Bank: Buy| CMP: Rs 590| Stop Loss: Rs 560| Target: Rs 675| Return: 14%
The stock had witnessed rally from low of Rs 274 in September 2016 to high of Rs 600 odd levels in May 2017. Since then the stock has been consolidating its gains Rs 600 and Rs 450 levels to form a base.
For the last six weeks, the price has seen range bound between Rs 590 and Rs 550 odd levels. Yesterday stock witnessed breakout from this short-term consolidation with momentum and volumes indicating buying participation in the stock.
The price has given a breakout from Bollinger band on the upside with the expansion of band on daily chart suggesting the start of the fresh uptrend and likely to see a breakout from major consolidation pattern.
MACD line on the daily chart has given positive crossover with its average after turning up from equilibrium level of zero. Thus, the stock can be bought at current levels and on dips to Rs 580 with a stop loss below Rs 560 and a target of Rs 675 levels.
Pidilite Industries: Buy| CMP: Rs 1145| Stop Loss: Rs 1105| Target: Rs 1250| Return: 9%
The stock is in a long-term uptrend forming tops and higher bottoms on the weekly charts. After touching a high of Rs 1195 in the month of May, the stock corrected down to Rs 1019 levels.
The price took support at 50 percent retracement of the rise from Rs 845 to Rs 1195. After consolidating between Rs 1019 and Rs 1100 odd levels stock witnessed breakout on the upside and trading in above breakout levels.
Price has been holding above 21-day moving average that has acted as support and resistance for the stock in the past. In Monday’s session, the stock witnessed momentum and volumes suggesting stock starting uptrend.
Thus, the stock can be bought at current level and on dips to Rs 1130 with a stop loss below Rs 1105 for a target of Rs 1250 levels.
Sun Pharmaceutical Industries: Buy| CMP: Rs 623| Stop Loss: Rs 590| Target: Rs 710| Return: 14%
The stock had been downtrend from an all-time high of Rs 1201 to low of Rs 432. Over the past one-year stock has formed a double bottom pattern on weekly between Rs 600 and Rs 432 levels. The rally from the second bottom has seen high volumes indicating value buying at lower levels.
Last week stock witnessed a breakout from the pattern on strong momentum and high volumes after consolidating below the neckline level. Price has moved above long-term 200-day moving average and recent swing took support at the average to move higher.
Thus, the stock can be bought at current level and on dips to Rs 610 with a stop loss below Rs 590 and a target of Rs 710 levels.
Larsen & Toubro Infotech: Buy| CMP: Rs 1881 | Stop Loss: 1800| Target: Rs 2100| Return: 11%
The stock is in long-term uptrend forming higher tops and higher bottoms on weekly charts. For the last six weeks stock has been consolidating between Rs 1880 and Rs 1650 odd levels.
The stock has closed at breakout levels. MACD line on the daily chart has moved above neutral level of zero and given positive crossover with its average suggesting stock is likely to see a breakout on the upside.
Thus, the stock can be bought at current level and on dips to Rs 1860 with a stop loss below Rs 1800 for a target of Rs 2100 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.The Great Diwali Discount!
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