Shabbir Kayyumi
Bulls continue to march northward without any hurdles and with the indices galloping higher in an unchartered territory that indicates a positive underlying trend.
The index formed a long body bullish candlestick pattern on the weekly timeframe, and the overall structure looks bullish, whereas positive bias is intact as long as the Nifty is trading above previous week's low placed around the 12,046 level.
Further upsides are likely in the near term towards the immediate target of cup and handle pattern comes near the 12,400 level.
Nevertheless, the Nifty is trading higher above all popular moving averages (20/50/100/200) DMA, indicating a strong bullish bias to continue further. At the same time formation of Golden Crossover of 50*200 DMA last month indicates strong price action in favour of bulls ahead.
A lot of activity in the F&O segment is seen, whereas the highest Open Interest (OI) in Put is around 12,000 strike and maximum Open Interest (OI) in Call is around 12,300 levels.
Moreover, a sustained move above high 12,300 levels will push prices higher towards the Fibonacci extension mark of 12,400, which coincides also with the cup and handle pattern targets.
Bank Nifty
The Bank Nifty continues to soar higher along with the Nifty which has also scaled new highs with the current momentum. As long as the banking index sustains above 31,800 mark, it can extend higher towards 33,000 -33,500 levels.
Here is the list of three stocks which could return 7-15 percent next week:
Ashok Leyland | Buy around: Rs 83 | Target: Rs 96 | Stop loss: Rs 75 | Upside: 15 percent
On the daily chart, the stock price has decisively broken out from its downward sloping line and sustaining above the same. On the daily and weekly chart, the stock has witnessed a shift of trend to the upward forming base with congestion.
The weekly strength indicator and the momentum indicator Stochastic both are in positive territory which supports upside momentum to continue in the near term. The stock price is sustaining well above all its significant moving averages, which supports bullish sentiment ahead. Buy Ashok Leyland above Rs 83 with a stop loss of Rs 75 and for the target of Rs 96.
Container Corporation of India | Buy around: Rs 575 | Target: Rs 625 | Stop loss: Rs 545 | Upside: 8 percent
On a daily chart, the stock has taken the support of its lower band of falling channel line formation in which the stock has been trading since the last many days, which indicate a breakout movement in the counter. Moreover, a bullish crossover in MACD also suggests a positive trend for the time being.
On an hourly chart, the stock is on the verge to give breakout of its flag pattern, which suggests a robust upside movement in the counter. Based on the above technical structure, one can take long position in the stock around Rs 575 with a stop loss of Rs 545 and for the target of Rs 625.
Cummins India | Buy around: Rs 548 | Target: Rs 590 | Stop loss: Rs 530 | Upside: 7 percent
The momentum indicator MACD has crossed the signal line indicating a start of a trend. The RSI too is above its key 50 mark indicating positive divergence on its side. The stock is breaking out of a falling channel with the weekly bullish engulfing candle, all indicating further bullishness.
The crucial resistance of the 20 SMA has been recently taken off which indicated short term momentum to an uptrend. We recommend buying in Cummins around Rs 548 with a stop loss of Rs 530 and aim for a target of Rs 590.
(The author is Head of Technical Research at Narnolia Financial Advisors Ltd)
Disclosure: Narnolia Financial Advisors/Analyst (s) does/do not have any holding in the stocks discussed but these stocks may have been recommended to clients in the past. Clients of Narnolia Financial Advisors Ltd. may be holding aforesaid stocks. The stocks recommended are based on our analysis which is based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
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.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
