Nifty continued its dominating journey northwards and managed to give life high closing above crucial resistance of 14,300 mark. At the same time, flat bottom green Heikin-Ashi candles on a daily and weekly time frame indicate the continuation of positive price action further.
Continuation of bullish crossover of 20-DMA & 50-DMA on daily & weekly time frame and sustainability above 5-DMA & 10-DMA suggests prices can trade higher towards targets of Flag classical pattern on a higher time frame, standing around 14,800. India VIX traded lower the entire last week and closed around crucial strong supports of 20.
Rising trend lines plotted using earlier swing highs are showing resistance near 14,600-14,800 zone. At the same time, the upper trendline of Andrew pitchfork is also standing near 14,800 mark suggesting index has the potential to rally towards 14,800 levels. However, any dip below the line of parity, 5 weekly SMA and swing low standing around 14,050 mark will give an early sign of trend reversal.
Bank Nifty
Bank Nifty & Nifty ratio is currently trading around 2.22, a few trading sessions earlier; it has given a breakout by crossing crucial resistance of 2.15. Overall ratio analysis of index pair suggests a target of 2.50 and Bank Nifty will be outperforming as compared to Nifty. This also gives an idea that one should focus more on banking stocks in the coming days. Nevertheless, the trading range for the banking index will be 30,300 on the lower side and 33,000 on the higher side for the upcoming week.
Here is the list of three stocks which can be bought for 10 percent return in short term:
Happiest Minds Technologies: Buy Around Rs 337 | Target: Rs 370 | Stop Loss: Rs 318 | Upside: 10 percent
The Stock is expected to give Inverted Head and Shoulder breakout on the hourly chart with decent volume. Bullish crossover in Stochastic and MACD are looking supportive for this upside breakout. Positive crossover of 20 & 50 DMA's indicating strength. Key support lies at Rs 318-315 zone until this break decisively, long position can held. Investors can take entry around Rs 337 levels with stoploss of Rs 318 on a closing basis for the target of Rs 370 and Rs 390.
Marico: Buy Around Rs 415 | Target: Rs 455 | Stop Loss: Rs 389 | Upside: 10 percent
This counter appears to have registered a clean break out with a close above its multi-week consolidation zone on the weekly line chart. A strong bull candle with decent volume is showing more upside moves in the coming sessions. Sustainability above all the significant moving averages showing upside move. If the stock closes above Rs 425 levels, it should eventually head higher towards its initial range breakout target of Rs 455. For the time being, positional traders are advised to buy around Rs 415 into this counter for a target of Rs 455 and Rs 475, with a stop below Rs 389 on a closing basis.
Torrent Power: Buy Around Rs 328 | Target: Rs 360 | Stop Loss: Rs 310 | Upside: 10 percent
Scrip spurted from a low of Rs 293 and formed Hammer candlestick pattern, it showed pullback on upside marked the high of Rs 323 mark and started consolidating there. Currently, it is waiting for the breakout on the upside so that it can accelerate buying momentum further. The emerging line of polarity on the daily time frame of the chart is suggesting bullish momentum in the scrip. Indicators and oscillators are showing conducive scenario in the coming sessions. So based on the mentioned technical structure one can go long in the scrip around Rs 328 for the target of Rs 360 and Rs 380 levels with a stop loss of Rs 310 mark.
(Shabbir Kayyumi is the Head of Technical Research at Narnolia Financial Advisors Ltd.)
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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