Breaking below 11,460, a decline towards 11,350 can be seen where weekly rising trend line connecting lows of 10,005 and 10,586 comes
Nifty initially saw a cautious start, but as the day progressed, it gained strength to close near the highs of the day on July 17.
Nifty closed at 11,663 up by 0.64 percent. Broader market indices BSE Mid-cap and Small-cap were up 0.69 percent and 0.27 percent, respectively. Advance-decline ratio on NSE was in favour of declines which needs to improve for the benchmark indices to move higher.
For the last one-week, Nifty has been largely rangebound with positive bias. Sustaining above 11,600, bounce back can continue towards 11,770-11,800 and then possibly 11,900. On the downside, immediate support is seen at 11,520 and then 11,460.
Breaking below 11,460, a decline towards 11,350 can be seen where weekly rising trend line connecting lows of 10,005 and 10,586 comes.
For Nifty options, maximum open interest for Put was seen at strike price 11,300 followed by 11,500; while for Call, maximum open interest was seen at 12,000 followed by 11,800.
A good amount of Put writing was seen in 11,600 suggesting support is shifting higher.
India VIX closed 3.83 percent lower at 11.56. VIX is at 19-month low, which has been supporting the market.
Here are the top stock trading ideas which can give good returns:
HDFC Asset Management Company: Buy | CMP: Rs 1,990 | Stop loss: Rs 1915 | Target: Rs 2,200 | Return: 10 percent
The stock is in an uptrend forming high tops and higher bottoms since its February low of Rs 1,329 on the daily chart. Recently, it touched an all-time high of Rs 2,099 and then corrected to Rs 1,886.
The rally leading up to the high was on good volumes while decline has been on below-average volumes indicating long formations holding onto the stock.
Recent correction from the high has taken support at 61.8 percent Fibonacci retracement of the last upswing from Rs 1,780 to Rs 2,099. The stock formed bullish candle on high volumes indicating buying participation in the stock and resumption of the uptrend.
Relative strength index has given positive crossover with its average on the daily chart. Thus, stock can be bought at the current level and on dips to Rs 1,965 with stop loss below Rs 1,915 for a target of Rs 2,200.
Adani Ports: Buy | CMP: Rs 418 | Stop loss: Rs 400 | Target: Rs 470 | Return: 12 percent
The stock has formed a double bottom pattern on the weekly chart between Rs 400 and Rs 290 over 9-month period.
In May, the stock witnessed breakout from the pattern on strong momentum and high volumes indicating buying participation in the stock. It went on to hit high of Rs 430 and since then has been consolidating above the breakout level. It has formed a symmetrical triangle pattern and showing breakout on the upside.
Relative strength index has given positive crossover with its average on the daily chart. MACD has moved above the equilibrium level of zero and given positive crossover with its average on the daily chart.
Thus, stock can be bought at the current level and on dips to Rs 412 with stop loss below Rs 400 for a target of Rs 470.
Petronet LNG: Buy | CMP: Rs 249 | Stop loss: Rs 238 | Target: Rs 285 | Return: 14 percent
The stock touched an all-time high of Rs 275 in November 2017 and then corrected down to Rs 200 in May last year. Since then, the stock has consolidated between Rs 255 and Rs 200 for more than a year now. It has been forming higher lows since December last year indicating buying coming in at higher levels.
The stock has formed a double bottom pattern with higher second low at the 200-day moving average. Price is currently trading below breakout level and likely to see breakout considering broad base formation.
Relative strength index has given positive crossover with its average on the daily chart. Thus, stock can be bought at the current level and on dips to Rs 245 stop loss below Rs 238 for a target of Rs 285.
Dabur India: Buy | CMP: Rs 425 | Stop loss: Rs 405 | Target: Rs 480 | Return: 13 percent
After hitting an all-time high of Rs 490 in August last year, the stock declined to Rs 360. It has bounced back from strong support of Rs 360, where multiple lows and previous highs are seen thus indicating as value area for stock.
Price has moved above 200-day moving average to close at four month high with a long bullish candle and good volumes. Price has given a breakout on the upside from Bollinger Band with an expansion of bands indicating continuation of trend in the direction of breakout on the daily chart.
Thus, the stock can be bought at the current level and on dips to Rs 418 with stop loss below Rs 405 for a target of Rs 480.
Muthoot Finance: Buy | CMP: Rs 632 | Stop loss: Rs 600 | Target: Rs 720 | Return: 14 percent
The stock is in uptrend forming higher tops and higher bottoms on the weekly chart since last October low of Rs 256. It has taken support at 89-day exponential moving average (EMA) and the stock has been trending higher. Last month, it hit all-time high of Rs 656 and went into sideways to negative consolidation.
The stock has bounced back from recent low formed at 89-day EMA and rising gap support. Relative strength index has given positive crossover with its average on the daily chart.
Thus, stock can be bought at the current level and on dips to Rs 620 with stop loss below Rs 600 for a target of Rs 720 levels.
The author is Head - Technical and Derivatives at Sanctum Wealth Management.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.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.