Jayant Manglik
The Nifty gained nearly a percent, amid volatility, last week. It hovered in a 200-point range throughout last week before settling close to 10,700 on Friday. Volatility due to the May series expiry added to participants’ worries last week.
This week we expect the volatility to continue given the 3-day Monetary Policy Committee meet starting Monday.
Technically, the Nifty has been consolidating for the last one month and facing strong resistance around the 10,800 zone. On the downside, 10,500 and 10,380 would act as a cushion.
Participants are in a fix, citing divergence between the performance of the benchmark index and broader market. Retail participants prefer midcap and smallcap counters and their continuous underperformance has dented sentiment at large. We do not expect this correction to end here, hence we strongly advice that investors focus more on stock selection and prefer index majors for trading.
Among sectoral indices, banking and financials are trading strong and are likely to hold this bias ahead as well, with noticeable support from the IT pack during down days. Traders should plan their positions keeping in mind the above factors.
Here is a list of top three stocks which could give 7-8% return in the short term:
Bank of Baroda: Sell | Target: Rs 122| Stop-loss: Rs 139| Return 8%
Most PSU banking counters are reeling under pressure and Bank of Baroda is no different. After retesting the resistance zone of multiple moving averages (100 and 200 EMA) on the daily chart, it has resumed the downtrend and is likely to maintain this bias ahead as well.
The chart pattern and confirmation indicators are also pointing towards a further fall. We advise creating fresh short on any bounce within Rs 133-135. It closed at Rs 131.55 on June 4, 2018.
GAIL (India) Limited: Buy| Target: Rs 360| Stop-loss: Rs 320| Return 7.46%
After retesting the support zone of 100-EMA on the weekly chart, GAIL India is now witnessing a rebound. It is showing tremendous resilience while we’re seeing noticeable pressure on the broader front.
It has retraced marginally in the last two sessions and is now hovering around the support zone of multiple moving averages (100 and 200 EMA) on the daily chart, offering a fresh buying opportunity.
Traders shouldn’t miss this chance and accumulate stocks within Rs 330-335. It closed at Rs 335.05 on June 4, 2018.
Oil & Natural Gas Corporation Limited: Sell| Target: Rs 158| Stop-loss: Rs 182| Return 8%
ONGC has recently witnessed a breakdown from a distribution pattern on the weekly chart and currently trading below the support zone of multiple moving averages (100 and 200 EMA) of both daily and weekly charts.
The chart pattern is clearly pointing towards sharp fall ahead. Traders may use any bounce in the range of Rs 172-174 to create fresh shorts. It closed at Rs 171.10 on June 4, 2018.
Disclaimer: The author is President - Retail Sales at Religare Broking. The views and investment tips expressed by Religare Broking on moneycontrol.com are its 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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