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Nifty may find it tough to cross 17,500; bet on these 3 stock ideas for good return

Technical analysis signals good upside for BHEL, Can Fin Homes and Spencer's Retail in the next few weeks, while the broader market trend would depend on Nifty’s move above or below the range of 17,300 – 17,500

September 07, 2021 / 12:46 PM IST
 
 
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The week began on an optimistic note for the domestic markets as the benchmark index Nifty reached another new high of 17,429. However, as the day progressed, there was some kind of profit booking at higher levels which dragged the index a bit lower and forced it to close below the 17,400 mark.

The bullish price action was highly concentrated on heavyweights like Reliance Industries and few IT stocks. That is a sign of concern. In addition the open interest was seen rising in 17,400 and 17,500 strikes CE option of weekly expiry. This indicates that 17,500 would be a tough level to be taken out on the upside. The support is placed at 17,300. A move above or below the given range of 17,300 – 17,500 would dictate further trend of the markets.

Here is a list of three stocks which could return 9-12 percent in couple of weeks:

BHEL: Buy | CMP: Rs 55.45 | Stop Loss: Rs 50 | Target: Rs 62 | Return: 11.8 percent

In May 2021, BHEL confirmed a massive breakout above Rs 55 mark and it rallied towards the peak of Rs 79. Then after it corrected, it has not retested the breakout zone. For quite some time, the stock is consolidating near this zone which is also the placement of 200-day simple and exponential moving average. There is also a small range breakout at current levels. The price action indicates that the stock is poised for fresh upside and the risk-reward ratio also looks lucrative to go long. Thus traders are advised to buy the stock in the range of Rs 55 - 53 with a stop loss of Rs 50 for the upside potential target of Rs 62 in coming 3-4 weeks.

Close

Can Fin Homes: Buy Above Rs 600 | CMP: Rs 591.95 | Stop Loss: Rs 575 | Target: Rs 650 | Return: 9.8 percent

Recently after entering into Futures and Options, there was a decent rally in Can Fin Home. During the process, the stock confirmed a breakout from the falling trend line on the daily scale. Since then there has been some consolidation in the stock in the past few sessions. A move above Rs 600 would confirm another price breakout which resembles a bullish 'FLAG' pattern. Thus traders can go long in the stock above Rs 600 with a stop loss of Rs 575 for an upside target of Rs 650 in 1-2 weeks.

Spencer's Retail: Buy Near Rs 110 | CMP: Rs 115.70 | Stop Loss: Rs 100 | Target: Rs 126 | Return: 8.9 percent

Since June 2019, Spencer's Retail has been consolidating in a broad range of Rs 110-60. In the recent session, the stock has managed to breakout from this range on a closing basis. This indicates fresh upside from here on. In addition, the weekly RSI is about to break above 70 which might add momentum to the stock. For a better risk reward, traders are advised to buy the stock on dips near Rs 110 with a stop loss of Rs 100 for an upside target of Rs 126 in coming 1 – 3 weeks.
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.
Mehul Kothari is the AVP - Technical Research at Anand Rathi.
first published: Sep 7, 2021 12:46 pm

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