Ashish Chaturmohta
The Nifty led by key heavyweights closed half a percent higher at 10,962 for the day. After a cautious opening, the index rallied in the first hour of trade and then remained bound the rest of the session.
The broader market, BSE Midcap and Smallcap underperformed the benchmark losing 0.56 percent and 0.70 percent respectively. The market breadth on the NSE was negative with one stock advancing for every two declines.
The index has been consolidating for the last six weeks and it has been witnessing narrowing of the range. Thus, suggesting the market is likely to see a breakout from the range.
Though the upside has been capped at 11,000, Nifty has been forming higher lows since its October low indicating buying coming in at higher levels.
On the upside, 11,000 needs to be taken with momentum and sustained for the index to move higher. Then the market can rally towards 11,090 and then 11,170. On the downside, the immediate support is seen at 10,845, below which the index can decline lower towards 10,690.
Here is a list of top five stocks which could return 7-15 percent in the next 1 month:
United Breweries: Buy| LTP: Rs 1,486| Stop loss: Rs 1,410| Target: Rs 1,700| Return: 14 percent
The stock touched a high of Rs 1,467 in September last year and then corrected down towards Rs 1,083 in October. Since then, the stock has witnessed a steady rise and formed higher tops and higher bottoms on the daily chart.
In Monday’s session, we saw a fresh breakout and the stock hit a new all-time high of Rs 1,491. The price has given a breakout on the upside from Bollinger Band and with the expansion of bands indicating a continuation of the trend in the direction of breakout on the daily chart.
The momentum indicators are in a 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 1,280 with a stop loss below Rs 1,410 and a target of Rs 1,700.
HDFC Bank: Buy| LTP: Rs 2,156| Stop loss: Rs 2,080| Target: Rs 2,300| Return: 7 percent
The stock has been consolidating in a tight range of Rs 2,150 and Rs 2,050 for the last seven weeks. It has been forming higher lows while the upside has been capped at Rs 2,150.
Thus, the stock has formed an ascending triangle pattern on the daily chart. Currently, the stock is trading at a breakout level of the pattern. MACD line has given positive crossover with its average above the equilibrium of zero on the daily chart suggesting a change in trend from sideways to up.
Thus, the stock can be bought at current levels and on dips towards Rs 2,130 and a stop loss below Rs 2,080 for a target of Rs 2,300.
Muthoot Finance: Buy| LTP: Rs 545| Stop loss: Rs 520| Target: Rs 625| Return: 15 percent
The stock has witnessed a major consolidation between Rs 525 and Rs 360 over the last 15 months. It formed a rounding bottom formation on the weekly chart and witnessed a breakout from the same on January 11.
Volumes on the up move are high that indicates buying participation in the stock. For the last few sessions, the stock has been consolidating above the breakout levels.
After Monday’s long bullish candlestick, the stock is suggesting resumption of an uptrend. The momentum indicators are in a bullish mode on the daily as well as on weekly charts.
Thus, the stock can be bought at current levels and on dips towards Rs 540 with a stop loss below Rs 520 and a target of Rs 625.
NIIT Technologies: Buy| LTP: Rs 1,269| Stop loss: Rs 1,200| Target: 1,420| Return: 12 percent
The stock has formed a double bottom formation on the weekly chart between Rs 1,280 and Rs 1,040 over the last four months. The price has rallied on above average volumes indicating buying participation in the stock and is now trading at breakout levels.
The price has 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 has given positive with average on the weekly chart and rising above equilibrium level of zero. Thus, the stock can be bought at current levels and on dips to Rs 1,250 and a stop loss below Rs 1,200 for a target of Rs 1,420.
Dabur (India): Buy| LTP: Rs 428| Stop loss: Rs 410| Target: Rs 475| Return: 11 percent
The stock had witnessed a correction from Rs 490 in August 2018 to November 2018 low of Rs 362, which is a strong support area for the stock. It has seen a strong rally and has touched high of Rs 459.
In December, the stock retraced 50 percent of the rally from Rs 362 to Rs 459. After consolidating in a narrow range, the stock is showing signs of reversal on the upside.
The relative strength index (RSI) has given positive crossover with its average on the daily chart. MACD has given positive crossover with its average on the daily chart. Thus, the stock can be bought at current levels and on dips to Rs 424 with a stop loss below Rs 410 and a target of Rs 475.
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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