Shabbir Kayyumi Narnolia Financial Advisors
Benchmark index gained 5 percent and achieved the target suggested by bullish Wolfe Wave pattern formation that was seen at lower levels earlier. After the market hit this target, it witnessed some profit booking. The trend remains intact till it holds 10,457.
If Nifty manages to sustain and hold above the 10,650, there is a possibility of extending move towards 10,750 and then 10,850. Nifty still has to fill the gap between 10,751 and 10,843. Also, Nifty is trading above 20-DMA (10,326), however recently an occurrence of Death Crossover has happened as 50-DMA has come below 100-DMA around 10,950.
On the lower side, break below 20-DMA at 10,326 will open the way again for 10,100-9,950 zone.
In the option market, highest open interest (OI) in Put was seen around 10,000 strikes followed by 10,200 strikes, whereas maximum OI in Call was around 10,700. Moreover, the option data indicates an immediate trading range between 10,200 and 10,700.
Bank Nifty
Banking index traded higher entire last week, however, it is taking a resistance from 25,900 on higher side and support near 25,000 on the lower side. Nevertheless, these immediate support levels should provide strong support, unless Bank Nifty decisively trades below it. We expect rangebound movement for coming sessions in a range of 24,800-26,000.
Here is the list of top five stocks which could give double-digit returns in short term:
Ashok Leyland | Buy Range: Rs 110-112 | Target: Rs 135 | Stop Loss: Rs 96 | Upside: 21 percent
It has confirmed the reversal from its current downtrend. It also gave bullish ascending triangle breakout in an hourly chart above 100-DMA and 200-DMA and thereafter it is consolidating above these DMAs since last few days.
Downside sloping trend line breakout also indicates positive move in the coming days. So some fresh buying is expected from the current levels in the short term. Therefore we are recommending to take a long position in the stock around Rs 110-112 with a stop loss Rs 96 and upside target Rs 135.
Mangalore Refinery and Petrochemicals | Buy Above: Rs 86.5 | Target: Rs 103.5 | Stop Loss: Rs 76 | Upside: 20 percent
Rising from a low of Rs 61, MRPL has shown pullback on upside marked by the high of Rs 86 followed by consolidation. This pullback rally and consolidation has taken the form of Pole & Flag price pattern from last few days.
Currently, it is waiting for the breakout on the upside so that it can accelerate buying momentum further. Emerging Inverted Head and Shoulders (H&S) on the daily chart is also 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 price may see momentum on the upside after giving the breakout above Rs 86.5 and hit a target of Rs 103.5 with a stop loss at Rs 76.
Hindalco Industries | Buy Range: Rs 235-240 | Target: Rs 285 | Stop Loss: Rs 216 | Upside: 19 percent
The stock has witnessed a decent correction recently from the peak of Rs 260 and now has shown indications for the formation of Inverse H&S pattern where construction of right shoulder is going on. Breakout is expected above Rs 250.
RSI has found support near oversold zone and has indicated a reversal to maintain a positive bias and has potential to rise further in the coming days.
Stochastic is also looking firm lending support to price action. With the chart looking attractive and decent volume participation witnessed, we recommend a buy around Rs 235-240 in this stock for an upside target of Rs 285. Keep a stop loss at Rs 216.
Century Textiles | Buy Range: Rs 830-825 | Target: Rs 965 | Stop Loss: Rs 748 | Upside: 17 percent
The scrip has seen a corrective decline from its recent high of Rs 988 and the decent halt is seen near Rs 718 where prices formed Double Bottom pattern.
Currently stock has formed Morning Star candlesticks pattern at bottom implying trend reversal on the upside. RSI seems to be bottoming near its oversold zone on the weekly chart which confirms its up move.
Formation of higher highs and higher lows is still intact on daily chart which also supports bullish sentiment. Buy Century Textiles around Rs 830-825 and on dips with a stop loss at Rs 748 and for the target of Rs 965.
Vedanta | Buy Around: Rs 225 |Target: Rs 260 | Stop Loss: Rs 202 | Upside: 16 percent
Recently the scrip topped in October 2018 around Rs 247 and then corrected over 19 percent. After that, prices were trapped in the rectangular zone at the bottom. Currently, scrip found its support near the falling trend line from where a chance of a bounceback is observed on the daily chart.
The MACD has given bullish territory on the daily chart along with declining histogram in negative territory implying further strength. The momentum indicator Stochastic is also looking bullish. Strong support is seen near Rs 200-205 levels. Buy Vedanta around Rs 225 with a stop loss at Rs 202 and for the target of Rs 260.
The author is Head - Technical & Derivative Research at Narnolia Financial Advisors.
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.
Disclosure: Narnolia Financial Advisors is engaged in the financial services business and its clients may be holding stocks mentioned in the report. Analyst(s) does/do not hold any positions in the stocks mentioned in the report. Narnolia Financial Advisors Ltd. and its analyst(s) might have given advice on the stocks mentioned in the report to its clients in the past.
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