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Last Updated : Jan 26, 2019 03:16 PM IST | Source: Moneycontrol.com

Nifty likely to hit 11,000 but after Interim Budget; 5 stocks that gave fresh break on MACD

On the daily chart, the index has been trading in an Upward Rising Channel formation for many days, which is a continuation formation and signifies a continuous move.

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It seems that from the current juncture, Nifty may plunge towards the level of its lower band of the formation from where the bounce back is expected, Sumeet Bagadia, Executive Director, Choice Broking, said in an interview with Moneycontrol's Kshitij Anand.

Q) It was a week which was dominated by earnings and global news flow. Nifty failed to hold on to 10,800 on January 25 and closed with losses of over 1 percent. Now, as we head towards the final week ahead of Interim Budget do you see a pre-budget rally which could take the Nifty towards 11000?

A) Yes, we are seeing a target of 11,000 but it may take a time of around two weeks. On a monthly chart, the Nifty has been trading in a rising Wedge formation where recently the index took the support of its lower band of the formation. This indicates a bounce back movement in the index.

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Moreover, the index has been continuously trading with its strong support of 21-months moving average, which is placed at 10,510 level, showing that the near-term trend is positive and based on which we may see an upside movement.

If we talk about the daily chart, the index has been trading in an Upward Rising Channel formation for many days, which is a continuation formation and signifies a continuous move.

But, it seems that from the current juncture, the index may plunge up to the level of its lower band of the formation from where the bounce back is expected.

Moreover, on a lower side, the Nifty has the strong support of its 200-days moving average as well which is placed at 10,729 levels.

A daily RSI's reading is at 47.15 level with a negative crossover, which points out for a negative breath, however, downside at 41 levels, the RSI has strong support from where a bounce back can be expected.

Q) How is NiftyBank looking on weekly as well as daily charts?

A) On the daily chart, the BankNifty has been trading in an Upward Rising Channel formation where the index has the strong support of its lower band, which comes at 27,070 level indicating a bounce back movement.

Moreover, the index has been trading with the strong support of 50-days moving average, which is placed at 27,018 level, again showing a bounce back movement. So we may see upside level of 27,800 while downside support comes at 27,000.

So, overall it suggests a northward movement and bull may get in action, however, it may take some time as momentum indicator is trending with a negative crossover.

Q) Any top three stocks which investors can look at for a period of 1-month?

A) Here is a list of top three stocks which could give 7-8 percent return:

TCS: Buy| LTP: Rs 1919| Target: Rs 2050| Stop Loss: Rs 1,860| Return 7%

At present level, IT sectors look attractive, and if we go for any particular stock then TCS looks good as it has given a breakout of its upper band of Triangle formation which indicates an upside movement in the counter.

Moreover, the stock has started to trade above its 50 days moving average, which is placed at Rs 1,915 level showing a positive trend for the time being.

A daily momentum indicator RSI reading is at 54.45 level with a positive crossover, apart from this, the RSI has given a breakout of its downward sloping trend line which points at a positive breath in the stock. So one could go and buy TCS in cash at Rs 1,929, a stop loss below Rs 1,860, with a target of Rs 2,030-Rs 2,050.

Havells India: Buy| LTP: 708| Target: Rs 765| Stop Loss: Rs 680| Return 8%

On the daily chart, the stock is on the verge to give a breakout of its neckline of Cup & Handle formation which is a continuation formation and indicates a robust upside movement in the counter.

Moreover, the stock has been trading with the strong support of 21 and 50-days moving average, which suggests a positive trend in the stock.

A daily momentum indicator RSI reading is at 54.45 level with a positive crossover, apart from this, the RSI has given a breakout of its downward sloping trend line which points out for a positive breath in the stock. One could get into the stock at Rs 708 level with a stop loss of Rs 680 and a target of Rs 765.

InterGlobe Aviation: Buy| LTP: Rs 1163| Target: Rs 1250| Stop Loss: Rs 1,110| Return 7%

On the daily chart, the stock has given a breakout of its neckline of the Inverse Head & Shoulder pattern with above-average volume which indicates an upside movement in the counter.

Moreover, the stock has been sustaining above its 200-days moving average which shows strength in the counter.

A daily momentum indicator RSI reading is at 58.75 level with a positive crossover which points out for a positive breath in the counter. One could go for buy at Rs 1,161.75 and upwards towards Rs 1,150 with a stop loss of Rs 1,110 and a target of Rs 1,240-Rs 1,250.

Q) Broader market has been displaying weak signals. There were more stocks which hit a fresh 52-week low in the week gone by compared to stocks which hit 52-week highs. Could see some buying after the event?

A) We may see some buying in stocks that are hitting 52-weeks low but that doesn't indicate any change in trend on an immediate basis. As since the last few days, volume has been taking an active part with the downfall in the prices, which is nothing but the accentuated selling pressure due to some negative fundaments or purely based on technical.

So whenever this type of picture happens, it normally leads to further southward movement along with some risk-taking buyers who want to hold their position for long term basis.

While for a shorter time, one should wait and let absorb all selling pressure and allow the stock form bottom. Until then wait with your loaded gun to hunt prey, which will give you handsome returns in meantime.

Q) List of stocks which witnessed fresh breakout based on MACD charts or any other parameter?

A) Here is a list of stocks that witnessed fresh breakout based on MACD parameter:

1. Petronet LNG: MACD is reading above the signal line and Zero Line along with a 200-day moving average.

2. Granules India: MACD is reading above the signal line and Zero Line along with a Breakout of Range Bound Movement with above-average volume and 21 and 50-Days Moving Average support.

3. Bajaj Finance: MACD is reading above the signal line and Zero Line along with a strong support 21 and 50 Days Moving Average and has been trading in an Upward Rising Channel Formation.

4. Havells India: MACD is reading above the signal line and Zero Line along with a Cup and Handle formation.

5. Kotak Mahindra Bank: MACD is reading above the signal line and Zero Line along with strong support of 21 & 50 days moving average, as well as the stock, has taken strong support of 200-days moving average.

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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First Published on Jan 26, 2019 12:47 pm
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