Traders need to keep a close eye how the market behaves during the first half of the forthcoming week. Ideally, at present, traders need to be prepared for both possibilities; a small relief rally or a continuation of the ongoing down move.
Equities outsmarted other asset classes in the financial year 2018. The S&P BSE Sensex and Nifty rose by about 10-11 percent for the current fiscal. In the broader markets and among sectoral indices, Nifty Midcap and Nifty Bank stood out with gains of 13 percent, each.
The key takeaway from Friday’s session was that the index managed to defend its crucial support placed at 10,100-10,000, although it closed below its key 200-days exponential moving average and 200-days moving average.
The concluding week of the financial year was a truncated one; but, it was not at all short of actions. We saw a massive recovery on Monday followed by a gap up the opening to retest the 10200 mark, but momentum fizzled out in last two sessions.
Indian markets remained under pressure on Wednesday, which was mainly on the back of a sharp overnight sell-off seen in US markets. Eventually, Nifty concluded the financial year tad above the 10100 mark.
“Barring the last couple of months, this financial year has been one of the memorable one for Indian stock markets. Although we lost 10 percent from record highs, our markets closed 10 percent higher from March 2017 close (i.e. 9173.75), which still is a great achievement for our benchmarks,” Sameet Chavan- Chief Analyst, Technicals and Derivatives at Angel Broking told Moneycontrol.
With a near-term view, the tide has certainly turned lower post the Union Budget and is likely to continue for some time as well. “For the coming week, 10230 - 10350 would be seen as a strong resistance zone; whereas, on the lower side, 10049 followed by 9951 would act as a crucial support zone,” he said.
Chavan further added that as long as Nifty remains within this range of 10230 - 9951, we expect the consolidation to continue, during which a lot of individual stocks would provide better trading opportunities.
Traders need to keep a close eye how the market behaves during the first half of the forthcoming week. Ideally, at present, traders need to be prepared for both possibilities; a small relief rally or a continuation of the ongoing down move, suggest experts.
We have collated a list of stock strategies for the week from different experts which could give up to 15% return in the short term:
Analyst: Sameet Chavan- Chief Analyst, Technicals and Derivatives at Angel Broking
SRF Ltd: BUY| Target Rs2060| Stop Loss Rs1885| Return 5.3%
This stock has been maintaining its sturdy structure and is now trading at a kissing distance from its record highs. On Tuesday, we witnessed a good price volume breakout from the recent hurdle of 1950 on a closing basis.
Due to lack of follow up buying on the following day, the stock prices retraced back to its breakout points, which we construe as a pullback move.The ‘RSI-Smoothened’ on the daily chart has surpassed the 70 mark, which we believe would provide the impetus for the next leg of the rally. Hence, we
recommend buying for a target of Rs.2060. Traders are advised to follow strict stop loss at Rs.1885.
M&M Finance Ltd: BUY| Target Rs486| Stop Loss Rs440| Return 5%
Since the early part of February; this stock has been cementing its positions around the ‘200-SMA’ on the daily chart. Due to last two days strong up move, the stock prices finally moved out of the congestion zone; thereby confirming short-term trend reversal in the counter.
The volumes have risen reasonably in this course of action; providing credence to the up move. The weekly chart now looks quite encouraging and hence, the stock is well poised for a decent move in the near term. One can look to go long around Rs.456 for a target of Rs. 486 by following a strict stop loss of Rs.440.
Brokerage: SMC Global Securities
Apollo Tyres Ltd: BUY| Target Rs320| Stop Loss Rs255| Return 15%The stock closed at Rs 277.05 on 28th March 2018. It made a 52-week low at Rs 207.15 on 30th March 2017 and a 52-week high of Rs. 288.65 on 9th
January 2018. The 200-days Exponential Moving Average (EMA) of the stock on the daily chart is currently placed at Rs 251.19.
The Short-term, medium term, and long-term bias look positive for the stock, as it is continuously trading in the range of Rs230 to Rs280 levels from the last eight months and has also formed an “Inverted Head and Shoulder” pattern, which is considered to be bullish.
Despite the volatility in the broader indices, the stock is still trading around its all-time high that shows the strength of the stock.
Moreover, the technical indicators such as RSI and MACD are also showing positive divergence at current levels. Therefore, one can buy in the range of 272- 274 levels for the upside target of 310-320 levels with a stop loss below 255.
Divis Laboratories Limited (DIVISLAB): BUY| Target Rs1240| Stop Loss Rs1000| Return 13%The stock closed at Rs 1090.20 on 28th March 2018. It made a 52-week low at Rs 532.65 on 29th May 2017 and a 52-week high of Rs. 1142 on 27th
December 2017. The 200-days Exponential Moving Average (EMA) of the stock on the daily chart is currently at Rs 959.24
As we can see on charts that stock is forming a “Cup and Handle” pattern on the weekly charts, which is bullish in nature. Although, the stock has not given the pattern breakout its consolidation shows that decent upside can be expected from current levels.
Moreover, it has taken around fifteen months to form the pattern, so the potential of rise is quite strong. Therefore, one can buy in the range of 1070-1080 levels for the upside target of 1210-1240 levels and a stop loss below 1000.
Analyst: Dinesh Rohira, Founder & CEO, 5nance.com.
JK Tyre & Industries Ltd: BUY | Target Rs 179 | Stop-loss Rs155 | Return 10%
After forming a strong support base at 143-134 levels, JK Tyre continued to trade on uptrend trajectory on weekly basis.
Despite a flat momentum in early trade, the scrip made a strong breakout from its crucial 50-days EMA level indicating a positive trend. It also witnessed a strong growth on volume front coupled with a breakout from an upper band based on Bollinger bandwidth, indicating an uptrend momentum.
On the weekly price chart, the scrip made a strong bullish candlestick pattern coupled with likely bullish crossover on MACD in the upcoming session.
Further, the RSI level at 58.8 up from earlier level signalled a positive cue with price trading above the resistance level. The scrip is currently holding support at 146 and resistance level is seen at 190. We have a BUY recommendation for JK Tyre which is currently trading at Rs. 162.95
Rallis India Ltd: BUY | Target Rs256 | Stop-loss Rs225 | Return 8%
Rallis India witnessed a robust momentum during last week’s trading session after forming a strong base at 215-213 levels on a short-term basis.
The scrip made a strong upward breakout from its 200&50-days EMA level indicating a reversal trend coupled with strong volume growth above its average level.
Further, Bollinger bandwidth suggests a positive breakout from its upper band placed at 220 levels which are likely to build the uptrend trajectory.
After closing on about 9 percent gain on weekly basis, the scrip made a bullish reversal candlestick pattern on its weekly price chart.
Further, the RSI at 59 above its resistance level has given a favourable buying regime coupled with positive cues on MACD. With price trading above crucial levels, the scrip is now facing a resistance at 264 levels and support level at 217. We have a BUY recommendation for Rallis India which is currently trading at Rs. 238.25
Prakash Industries Ltd: SELL | Target Rs159 | Stop-loss Rs175 | Return 6%
Prakash Industries continued to consolidate on its weekly and monthly price chart despite attempting to recoup its losses but failed to hold the level to slip below its crucial levels.
The scrip took a strong resistance at 168 levels on weekly trend channel which is likely to breach below on the backdrop of weak volume support. The scrip continued to lose about 4 percent on weekly basis and 20 percent on monthly basis.
The scrip continued to form a solid bearish candlestick pattern on its weekly price chart with price currently trading below all the levels. Further, the secondary momentum indicator continued to indicate negative signal with RSI at 36 levels coupled with weak support from MACD indicator.The scrip is facing a resistance at 177 levels and strong support at 156 levels. We have a SELL recommendation for Prakash Industries which is currently
trading at Rs. 169.10Disclaimer: 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.The Great Diwali Discount!
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