Ashish Chaturmohta
On July 1, after a gap-up opening, Nifty trended higher but plateaued out in later part of the session. Nifty closed at 10,430 level, up by 1.27 percent, for the day.
Broader market indices BSE Midcap and Smallcap underperformed the benchmark indices with a gain of 0.18 percent and 0.39 percent, respectively, for the day. The market breadth on NSE was in favour of bulls with an advance-decline ratio of 5:4.
As mentioned earlier, the index had hit a cluster of resistance around 10,550 levels last week. It corrected down towards 10,194 and managed to hold above it.
Now, after trading in a narrow range, the index seems to be peeking out on the upside from the range with Wednesday’s five high close indicating a positive bias.
A close above 10,550 levels, and the index can rally towards 10,650 and then 10,850 levels. On the downside, support is seen at 10,194 which is recent low and 10,100 where rising support trendline connecting lows of 7511 and 8806 is seen. Thus, below 10,194-10,100 next support is seen at 9,850 levels.
In Nifty July monthly expiry options, the maximum open interest for Put is seen at strike price 10,000 followed by 9,000 while for Call maximum open interest is seen at 11,000 & 11,500 followed by 10,500.
Thus, Nifty option distribution data is suggesting support at 10,000 and resistance at 10,500 followed by at 11,000. India VIX continues to find support around 29-28 levels after closing at 28.11 for the day.
Here is a list of top five stocks that could give up to 15% returns each in the next 1-3 months:
ICICI Bank: Buy| LTP: Rs 364| Stop Loss: Rs 345| Target: Rs 420| Upside 15%
In the months of February and March, the stock saw a decline from 551 to low of 268 low. Since then, the stock has been consolidating in the range of 385 to 268 at lower levels.
On the weekly chart, the stock has formed a double-bottom reversal pattern. Volumes have been high at lower levels indicating accumulation in the stock.
Relative strength index and Stochastic have given a positive crossover with respective averages on the daily chart. Thus, the stock can be bought at current levels and on dips towards 358 with a stop loss below 345, and a target of 420 levels. Rallis India: Buy| LTP: Rs 269| Stop Loss: Rs 250| Target: Rs 310| Upside 15%
The stock has seen a multi-year consolidation between 300 and 140 odd levels over an almost 5-year period. The current rally from the lower end of range has been on high volumes indicating buying participation in the stock.
For the last couple of weeks, the stock has been consolidating in a narrow range between 280 and 255 levels before the next leg of the up move.
The Average Directional Index (ADX) line, is turning up after flattening out and with Plus Directional line above the equilibrium level of 20 on the weekly chart.
Stochastic has given a positive crossover with its average on the daily chart. Thus, the stock can be bought at current levels and on dips towards 265 with a stop loss below 250, and a target of 310 levels. Balkrishna Industries: Buy| LTP: Rs 1270| Stop Loss: Rs 1205| Target: Rs 1460| Upside 15%
The stock has formed multiple lows in the region of 750-700 where previous lows were seen. Thus, indicating a strong support zone.
Since then, the price has bounced towards current levels to form a higher top and high bottom on the daily chart. Looking at monthly chart stock has formed W shaped bottoming out pattern.
The Average Directional Index (ADX) line, is moving up from an equilibrium level of 20 with a rising Plus Directional line on the daily chart. Relative strength index and Stochastic have given positive crossover with respective averages on the daily chart.
Thus, the stock can be bought at current levels and on dips towards 1250 with a stop loss below 1205, and a target of 1460 levels.
Manappuram Finance: Buy| LTP: Rs 158| Stop Loss: Rs 150| Target: Rs 182| Upside 15%
The stock witnessed a sharp decline from 195 to 74 levels from January to March months. After hitting the low, the stock has been in an uptrend forming a higher top and higher bottoms on the daily chart.
Volumes have been on up move indicating buying participation in the stock. The price has crossed the key 61.8% Fibonacci retracement of the entire fall 195-74 which comes at 149 level.
For the last couple of weeks, the stock has been consolidating its gains before the next up move. MACD line has moved above the equilibrium level of zero on the weekly chart.
The relative strength index has given positive crossover with its average on the daily chart. Thus, the stock can be bought at current levels and on dips towards 155 with a stop loss below 150, and a target of 182 levels.
Tata Consultancy Services Ltd: Buy| LTP: Rs 2092| Stop Loss: Rs 1985| Target: Rs 2410| Upside 15%
The stock made a low of 1506 in the month of March and since then it is trending higher. It has been forming a higher top and higher bottom on the daily chart.
The price has been finding support near its 21-day exponential moving average. The price has moved above the key resistance level of 2000 and consolidating above it for a month now.
After a big spurt last week, the stock has been correcting in narrow range for last few weeks. MACD line on the weekly chart has moved above the equilibrium level of zero on the weekly charts as well which indicates positive bias.
Thus, the stock can be bought at current levels and on dips towards 2060 with a stop loss below 1985, and a target of 2410 levels.
(The author is Head of Technical and Derivatives, Sanctum Wealth Management)
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