Nifty heading towards 10,700; 5 stocks to buy this week that can give up to 17% return

The year 2018 started on a bullish note as the Nifty50 hit a fresh record high in the first week of the calendar year. But the rally is not over yet and the index could very well hit 10,600-10,700 in the days to come, suggest experts.

The Nifty50 bounced back after hitting a low of 10,404 to hit a record high of 10,566.10 on Friday. The index closed the week with gains of 0.27 percent.

Going forward, analysts advise investors to stay long with a trailing stop loss placed below 10,500. As long as the Nifty trades above this level, there are higher chances of the index hitting 10,600-10,700 and even 10,800 levels in the current series. However, a fall below 10,350 could negate the pattern.

“The market has begun on a positive note for the week to close at an all-time closing high levels. Technically, Nifty has still scope for up move along with Bank Nifty as the RSI on the daily chart is at 63, implying strong momentum,” Vaishali Parekh, Head-Technical Desk, Prabhudas Lilladher told Moneycontrol.

“Tracking the momentum, the up move the projected target is somewhere closer to 10,700-10,800 in days to come. The view would be negated if Nifty breaks 10350 levels decisively,” she said.

Parekh advises traders to remain more stock specific rather than index specific. The stocks with positive bias having favorable risk-reward ratio would be MRPL, HPCL, ITC, Infosys which should give a good return of around 5-10% in one or two months.

The market being at an all-time high, traders should have discipline while trading and should observe a strict stop loss. Technical experts see some bit of profit booking as we approach critical resistance of 10,600.

“It has been a good start for Indian markets for the year 2018. But, certainly, there are gaps if one can spot. If we just focus on the index, especially last 10 sessions’ move, it does not depict the right picture. The index remained in a slender range of 150 points, but the real interest was seen outside the index,” Sameet Chavan, Chief Analyst- Technical Derivatives, Angel Broking Pvt Ltd told Moneycontrol.

“So many small size midcap counters literally flew in last 3-4 days along with selective ‘F&O’ stocks. We have been quite vocal about this possibility that one should avoid scratching heads in the index and should rather focus on such pockets,” he said.

Going ahead, as far as the index is concerned, Chavan does not expect any major movement as we expect the index to remain lethargic and see some profit booking in the zone of 10,600 – 10,630. On the flipside, 10,500 followed by 10,400 would be seen as a crucial support zone.

In the last 3-4 trading sessions, we have witnessed massive buying interest in some of the small-size ‘Midcap’ counters. This stock was slightly late to realize it and hence, started participating in the last couple of days.

However, the kind of price action that we have seen along with reasonably higher volumes, the optimism is likely to continue. Technically speaking, the stock prices managed to surpass the 14-month resistance zone along with ‘RSI-Smoothened’ continuing its upward trajectory above the 70 mark.

In addition, the ‘ADX 14’ started gaining strength above the 25 mark. Thus, we recommend buying this stock on the minor dip for a target of Rs 87 over the next 5 – 10 sessions. The stop loss should be fixed at Rs 64.50

Recently, this stock managed to come out of its four weeks consolidation zone with sizable volumes; indicating strong buying interest above the breakout point of 82.50.

However, due to lack of follow up buying, the stock prices once again consolidated with a gradual decline for nearly three days. However, the good thing about this minor dip is it has happened on very low volumes and in the process, the stock managed to defend the ‘200-day SMA’ successfully.

On Friday, we saw decent recovery from lower levels, hinting towards the resumption of an uptrend as we enter the next trading week. This certainly calls for a good low-risk trade.

The momentum traders can look to place their bets for a short-term target of Rs 93. The stop loss should be fixed at Rs 81.

This stock has been enjoying its stellar run since last twelve months and has clocked new record highs. Undoubtedly, the longer term outlook remains strongly bullish as the overall structure looks quite sturdy.

But, with a near-term view; there are some early signs of exhaustion. Since the last couple of weeks, the stock has been struggling to sustain around 670 and despite market closing at historical highs, the stock remained under pressure.

Technically speaking, we can see a formation of ‘Dark Cloud Cover’ at recent highs formed during the penultimate week, which got activated due to last week’s decline.

Thus, we continue to recommend selling for a short-term target of Rs 612. The stop loss now should be fixed at Rs 661.

The stock closed at Rs 1034.90 on 05th January 2018. It made a 52-week low at Rs 610.45 on 09th January 2017 and a 52-week high of Rs 1047 on 16th October 2017. The 200-days Exponential Moving Average (EMA) of the stock on the daily chart is currently at Rs 892.02.

The stock witnessed a sharp up move from Rs 680 to Rs 1045 levels in a single upswing and has now traded sideways in the range of Rs 640 to Rs 1030 levels with a positive bias.

In sideways, it was forming a “Continuation Triangle” on the weekly charts and has given the breakout of same in the last week.

It also managed to close above the breakout levels, which indicates that buying is aggressive for the stock. Therefore, one can buy in the range of Rs 1010-1015 levels for the upside target of Rs 1110-1140 levels with a stop loss below Rs 950.

The stock closed at Rs 102.35 on 05th January 2018. It made a 52-week low at Rs 80.43 on 11th August 2017 and a 52-week high of Rs 121.17 on 25th April 2017. The 200-days Exponential Moving Average (EMA) of the stock on the daily chart is currently at Rs 92.82.

The stock melted down sharply from the yearly high of Rs 121 levels and registered a yearly low of Rs 80 in a single downswing. Then after, it was consolidating in Rs 80-95 levels for six months and formed an “Inverted Head and Shoulder” pattern on weekly charts, which is bullish in nature.

Last week, the stock has given the neckline breakout of pattern with high volume, so buying momentum is expected to continue in coming days. Therefore, one can buy in the range of Rs 99-100 levels for the upside target of Rs 115-120 levels with a stop loss below Rs 92.