Shabbir Kayyumi Narnolia Financial Advisors
Amid currency jitters across the globe, Nifty recovered and closed near the earlier high levels last week. Auto, FMCG, IT, Pharma, PSU Bank, Metals, financial services and private banks supported the indices towards its rally to 11,500-mark.
Although overbought level on oscillators are warranting some profit booking at upper levels, yet no reversal in price pattern is seen on the weekly chart. Classical Cup and Handle breakout has triggered around 11,450-levels and the pattern suggests Nifty target around 11,550.
Nifty's 5-day close simple moving average (SMA) is around 11,415 which suggests bull run is intact unless index trades below it. India VIX, too, fell by 3.48 percent to 13.17 on Friday and hence assures of “no major panic” in the market.
Derivatives Structure indicates an immediate trading range between 11,600 and 11,300. Interestingly, highest unwinding of 8,50,000 OI happened in 11,500 CE in August Expiry in a single day on Friday indicating that CALL writers are shifting their position to higher levels.
We expect sideways to bullish movement for the coming session with range of 11,600-11,350 though stock-specific action can be seen. Nifty closing below 11,360-levels will lead correction to 11,230/11,150 levels.
Here is the list of top five stocks that could return 13-24% in short term:
Oriental Bank of Commerce: Buy | Buy Range: Rs 77-79 | Target: Rs 98 | Stop Loss: Rs 70 | Upside: 24%
It has confirmed the reversal from its current downtrend. It also gave bullish breakout above 20 DMA and 50 DMA and thereafter it is consolidating above these DMA’s since last few days.
Emerging Inverted head and shoulder also indicating positive move in the coming days. So some fresh buying is expected from the current levels in the short term.
Therefore we are recommending long position in the stock above Rs 79 with a stop loss Rs 70. Upside target are Rs 95 and Rs 100 levels.
Vijaya Bank: Buy | Buy Range: Rs 60-62 | Target: Rs 75 | Stop Loss: Rs 51 | Upside: 21%
Scrip seems bottoming out at its lower levels of Rs 47 mark from where it formed consolidation on weekly chart suggesting upsurge on higher side.
Sustainability above downward sloping line along with positive crossover in MACD and divergence in RSI are giving cues that scrip can take a turn on northward side.
Principal of polarity can provide strong support in coming sessions. Aforementioned rationale suggests buying in the scrip around Rs 62-62 for the target of Rs 73 and Rs 76 with the stoploss of Rs 51 mark.
Lupin: Buy | Buy Range: Rs 870-880 | Target: Rs 1,050 | Stop Loss: Rs 794 | Upside: 19%
Scrip spurted from a low of Rs 725, it showed pullback on upside marked the high of Rs 946 mark and started consolidating there. This pullback rally and consolidation has taken the form double bottom price pattern from last few days.
Currently, it is waiting for the breakout on upside so that it can accelerate buying momentum further. Emerging Inverted Head & Shoulder is on daily time frame of chart suggesting bullish momentum in the scrip.
Indicator and oscillator are also showing conducive scenario in the coming sessions. So based on the mentioned technical structure, we expect that price may see momentum on upside after giving the breakout above Rs 910 and hit our target of Rs 1,020 and Rs 1,100 mark.
DHFL: Buy | Buy Range: Rs 660-665 | Target: Rs 770| Stop Loss: Rs 594 | Upside: 15%
Scrip has been moving in a strong Bull trend since long. Occurrence of Cup and Handle price pattern on weekly chart suggest a strong momentum on up side, however breakout of the pattern was weekly close above Rs 650 mark.
Currently it is trading above all its important moving averages. Sustainability of RSI above Rs 60 is also favorable for bullish momentum of the scrip.
One can buy this stock around Rs 660-665 with the stoploss of Rs 594 for the target of Rs 740-770 levels.
Century Textiles: Buy | Buy Range: Rs 910-920 | Target: Rs 1,035 | Stop Loss: Rs 869 | Upside: 13%
Emerging Inverted Head &Shoulder on daily chart is showing that stock has bottomed out near it lower levels.
Strong support near its 200 WMA on weekly chart showing upside momentum remains intact. Breakout is expected to come above 960 where buying momentum will accelerate towards our target of Rs 1,020 levels.
We recommend accumulating century textile around Rs 920 with the stop loss of Rs 870 for the target of Rs 1,020-1,050 marks.
Disclaimer: The author is Head - Technical & Derivative Research at Narnolia Financial Advisors. The views and investment tips expressed by investment experts on Moneycontrol are his own, and not that of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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