Ashish Chaturmohta
The market rallied on March 26 after losses seen in the previous two trading sessions. The Nifty50 gained momentum in the latter part of the day to close at 11,483.
The broader market indices, BSE Midcap and Smallcap gained 1.09 percent and 0.6 percent, respectively. The market breadth on the NSE was positive with five stock advancing for every four declines.
For the day, the index formed a long bullish candle. It filled previous day’s falling gap area and closed above it. Now, March 25 low of 11,311 has become a short-term bottom with immediate support at 11,395 for the market.
Now holding above 11,395, Nifty expect the index to test its recent high of 11,572 and crossing above it can fuel a rally towards its all-time high of 11,760.
While on the downside, a break below 11,311, the index may see decline towards 11,120. In Nifty options, maximum open interest for Puts is seen at strike price 11,000 followed by 11,400; while for Calls it is seen at strike prices of 11,500 and 11,600.
Put writing was seen in 11,400 and 11,600 along with unwinding in lower strike Puts. Call unwinding in 11,400, 11,500 and 11,600 strike price was seen.
India VIX declined by 1.14 to close at 16.48. Volatility has seen a steady rise in the last couple of weeks. Hence further rise above 17 will be a cause of concern for the market.
Here are five stocks that could give 11-15 percent return in the next one month:
Asian Paints: Buy| CMP: Rs 1,485| Stop loss: Rs 1,430| Target: Rs 1,650| Upside: 11 percent
The stock has been trending higher in a rising channel since December 2016 on the weekly chart. The stock has given a breakout from its three-month-old consolidation.
The price has given a breakout on the upside from Bollinger Band with the expansion of bands indicating a continuation of the trend in the direction of breakout on the daily chart.
The Average Directional Index line (ADX), indicator of trend strength, has moved above the equilibrium level of 20 on the daily chart. MACD line has given a positive crossover with its average and moved above the neutral level of zero on the daily chart.
Thus, the stock can be bought at current levels and on dips towards Rs 1,460 with a stop loss below Rs 1,430 and a target of Rs 1,650.
Power Grid Corporation of India: Buy| CMP: Rs 203| Stop: Rs 195| Target: Rs 225-230| Upside: 13 percent
The stock touched an all-time high of Rs 226 in August 2017 and then corrected down towards Rs 174 in July last year. Since then, the stock has been consolidating in the range of Rs 174 and Rs 205 for the last 10 months.
It has formed a triple bottom formation on weekly charts and is currently trading at a breakout level. The lows of the pattern were formed at 200-weekly moving average indicating a strong support level for the stock.
The volume was higher during the formation of final bottom indicating accumulation at lower levels. The MACD line has given a positive crossover with its average and moved above the neutral level of zero on the weekly chart.
Thus, the stock can be bought at current level and on dips towards Rs 200 with a stop loss below 195 and a target of Rs 225-230.
Cholamandalam Investment & Finance: Buy| CMP: Rs 1,382| Stop loss: Rs 1,325| Target: Rs 1,500-1,550| Upside: 12 percent
The stock witnessed a decline from all-time highs of Rs 1,760 in May last year to a low of Rs 1,038 in October. The stock has consolidated between Rs 1,400 and Rs 1,038 for the last six months.
It has formed a bullish double bottom formation on the weekly chart. The second low is higher that indicates buying coming at higher levels.
Recently, the price had moved above its 200-day moving average and last week’s correction has taken support at average to bounce back on March 26.
Stochastic has given positive crossover with its average on the daily chart. The MACD line has given positive crossover with its average and moved above the neutral level of zero on the weekly chart.
Thus, the stock can be bought at current level and on dips towards Rs 1,305 with a stop loss below Rs 1,325 and a target of Rs 1,500-1,550.
Pidilite Industries: Buy| CMP: Rs 1,227| Stop loss: Rs 1,170| Target: Rs 1,400| Upside: 14 percent
The stock has formed a bullish inverted head and shoulders pattern on the weekly chart. On March 26, the price has given a breakout from the pattern on strong momentum indicated with a long body candle and high volume that indicates buying participation the stock.
Also, the stock has crossed its previous all-time highs and is now trading in uncharted territory. The price has given a breakout on the upside from Bollinger Band indicating continuation of the trend in the direction of breakout on daily as well as on weekly charts.
The ADX line has moved above the equilibrium level of 20 on the daily chart. Thus, the stock can be bought at current level and on dips to Rs 1,210 with a stop loss below Rs 1,170 and a target of Rs 1,400.
L&T Finance Holdings: Buy| CMP: Rs 148| Stop loss: Rs 141| Target: Rs 170| Upside: 15 percent
The stock witnessed a sharp decline from August high of Rs 189 last year to November low of Rs 110. The price has bounced back towards Rs 159 where it faced resistance at its 200-day moving average and declined towards Rs 120 to test previous low.
The stock has rallied back to current levels to form higher low indicating buying coming at higher levels. It has bullish pole and flag pattern on daily charts which is a continuation pattern.
The RSI and Stochastic have given positive crossover with their respective averages. Thus, the stock can be bought at current levels and on dips to Rs 145 with a stop loss below Rs 141 and a target of Rs 170.
The author is Head of Technical and Derivatives at Sanctum Wealth Management.
Disclaimer: The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
