Shabbir Kayyumi
The domestic market saw lackluster trading last week and settled marginally lower, taking a breather after the recent up move above 12,000 levels. Weekly candlestick pattern shows an indecisive Doji, failure to sustain above the 12,000 mark indicated an impending weakness, which will be confirmed on a close below the 11,800 level. Below this, selling will get accentuated further with initial targets placed at around 11,700 and 11,600 levels.
On the other hand, a decisive close above 12,050 will take the index in a new zone, which can extend towards the 12,200 level. Hope for a bullish trend remains as prices are trading well above all short term Guppy moving averages.
A lot of activity in FNO segment has been seen lately, a week before expiry, maximum Open Interest (OI) in Call is around 12,000 level, and that suggests strong resistance. A close below 11,900 level. where higher Put open interest exists will make market sentiments soft.
Bank Nifty
The banking index has managed to close above its previous week’s close (31,000) and major psychological levels of 31,000 indicating strength in the current up move. As long as the banking index sustains above 30,800 points, it can extend higher towards its life high placed around 31,700 levels.
Here are the top 3 stocks which can give 10-16 percent return
TVS Motor Company : Buy around Rs 435 | Target: Rs 505 | Stop loss: Rs 385 | Upside: 16 percent
The stock has witnessed decent erosion from the peak of Rs 504 to levels around Rs 438 currently. The appearance of a bullish candle near support levels, along with the RSI bouncing off oversold region infers an immediate floor near Rs 438-440 zone.
As of now, it indicated a bullish candle to signify strength, and has the potential to carry on the momentum still further on the upside. Indicators and oscillators are looking conducive for the price pattern. Looking at all these technical factors, we suggest buying in the scrip around Rs 435 with stop loss below Rs 385 on a closing basis for the target of Rs 505 levels.
Tata Steel : Buy around Rs 385 | Target: Rs 435 | Stop loss: Rs 355 | Upside 12 percent
The stock is undergoing consolidation in the longer time frame, and is on the verge of pull back from the polarity area of support. A few days back, the stock gave double bottom breakout and after retracing, it is once again testing its previous resistance from where the breakout occurred.
The weekly momentum indicator MACD has crossed the signal line which indicates the start of a trend. A pause at the support area suggests a significant rebound is likely and hence we recommend buying Tata Steel around Rs 385 with a stop loss of Rs 355 and aim for a target of Rs 435.
Maruti Suzuki India : Buy around Rs 7,000 | Target: Rs 7700 | Stop loss: Rs 6650 | Upside: 10 percent
The daily chart of the stock reveals that demand is increasing and supply is diminishing. The formation of a Doji candle near the line of parity shows a rebound from its lower levels. Positive divergence in RSI and bullish crossover in MACD in the hourly chart is showing strength. With the chart looking attractive and decent volume participation witnessed, we recommend a buy around Rs 7,000 in this stock for an upside target of Rs 7,700, keep a stop loss of Rs 6,650.
(The author is Head of Technical Research at Narnolia Financial Advisors.)
Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their 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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