Ashish Chaturmohta
Nifty saw a gap-up opening but was range-bound for the most part of the session. In the last hour of trade, the index hit a high of 10,176 and then corrected to a low of 10,035.
Nifty finally settled at 10,061 up by 0.8 percent on June 3. Broader market indices, BSE Midcap and Smallcap, witnessed a gain of 0.31 percent and 1.24 percent, respectively, for the day. The market breadth on NSE was positive with an advance-decline ratio of more than 2:1.
The Nifty50 has seen six consecutive days of gain from the low of 9,004 to a high of 10,176. For the day, the index has formed a bearish candle with upper shadow.
Thus, if the index starts to trade below 9,880 levels then the correction can be seen towards 9,600 levels. If Nifty slips below the 9,600 support then the selling pressure could take the index towards 9,400 levels where rising trend line support is seen. On the upside 10,176 needs to be taken out for rally towards 10,440-10,500 levels.
In Nifty June monthly expiry options, maximum open interest for Put is seen at strike price 9,000 followed by 9,500 while for Call maximum open interest is seen at 10,000 followed by 10,500 and 11,000.
Here is a list of top 5 stocks which could give 12-16% in the next 1-3 months:
Indraprastha Gas: Buy| LTP: Rs 490| Stop loss: Rs 465| Target: Rs 570| Upside 16%
In the months of February and March, the stock witnessed a decline from the high of 534 to a low of 284. From lows, the stock has rallied towards 480-500 levels.
It has crossed 61.8% Fibonacci retracement level of the whole and consolidating above it. The last seven weeks of sideways price action have been slightly higher lows indicating positive bias.
The price is likely to resume its uptrend journey after moving towards the upper end of the range. MACD is turning from an equilibrium level of zero and given positive crossover with its average on the daily chart.
Thus, the stock can be bought at current levels and on dips towards 480 with a stop loss below 465, and a target of 570 levels. Berger Paints: Buy| LTP: Rs 515| Stop Loss: Rs 478| Target: Rs 580| Upside 13%
The stock made a low of 390 in March after witnessing a decline from the high of 595 in February. Since then, the stock has seen a bounce back to 547 levels and then pulled back towards 432 levels.
Thus, after the recent rally, the stock is forming a bullish double bottom pattern on the daily chart. The second bottom is higher than the first which indicates buying coming at higher levels.
The price has given a breakout on the upside from Bollinger Band with the expansion of bands on the daily chart indicating a continuation of the trend in the direction of the breakout.
Relative strength index and Stochastic have given a positive crossover with their respective averages on the weekly chart.
MACD line has moved above the equilibrium level of zero on daily. Thus, stock can be bought at current levels and on dips towards 495 with a stop loss below 478, and a target of 580 levels. Sanofi India: Buy| LTP: Rs 8162| Stop loss: Rs 7750| Target: Rs 9400| Upside 15%
The stock is in a long-term uptrend forming a higher top and higher bottom on the monthly chart. In mid-April, the stock touched an all-time high time of 8584 and then corrected down towards 7306.
It has been consolidating between 7300 and 8200 odd levels for more than six weeks. The stock is at an all-time high suggesting resumption of the uptrend. MACD line has given positive crossover with its average above equilibrium level of zero on the daily chart.
The Average Directional Index (ADX) line, an indicator of trend strength is turning up from the equilibrium level of 20 with rising Plus Directional line on the daily chart.
Thus, stock can be bought at current levels and on dips to 8000 with stop loss below 7750, and a target of 9400 levels.
Tata Steel: BUY| LTP: Rs 317| Stop loss: Rs 302| Target: Rs 360| Upside 14%
The stock declined sharply from 500 to 250 odd levels in the month of January to March. Here, the stock took support at the long-term monthly trend line connecting lows of the year 2008, 2013 and 2015.
The stock has consolidated between 300 and 250 odd levels for the last 10 weeks above the trend line. At the start of the week, the stock gave breakout from the range with high volumes and strong momentum.
MACD line is moving higher above the equilibrium level of zero on the daily chart and given positive crossover with its average on a weekly chart.
Hence, the stock is likely to see a sustained bounce back rally after consolidating at lower levels. Thus, stock can be bought at current levels and on dips towards 311 with a stop loss below 302, and a target of 360 levels. Bharti Airtel: Buy| LTP: Rs 551| Stop loss: Rs 525| Target: Rs 635| Upside 15%
The stock has seen a major multi-year consolidation between 540 and 220 odd levels on the monthly chart. Last up move from the bottom end of this range was on high volumes indicating accumulation at lower levels in the stock.
The recent rally from 200-Days moving average around 400 odd levels has given a multi-year breakout to touch an all-time high of 612.
For the last couple of weeks, the stock has seen a correction from the high, but within the breakout candle range on a weekly chart. Thus, the stock is consolidating at breakout levels.
The Average Directional Index (ADX) line, an indicator of trend strength is turning up from the equilibrium level of 20 with rising Plus Directional line on the weekly chart. Thus, stock can be bought at current levels and on
(The author is Head of Technical and Derivatives, Sanctum Wealth Management)
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