Vinay Rajani
From the bottom of 9,951 registered on March 23, 2018, the Nifty50 has risen by 6.9 percent till date. During Monday’s session, Nifty50 hit a high of 10638 and witnessed profit booking in the second half, to close at 10,584.
After healthy recovery of almost 700 odd points from the recent low, Nifty has formed “Doji” candlestick pattern on the daily charts, which indicates indecision among the bulls and bears.
The level of 10638 has been a crucial resistance level. Why? The Nifty50 on 8th February 2018, formed an intermediate top at 10638 which was then followed by a downtrend.
However, there is no sign of bearish reversal seen as of yet on the charts. The Nifty is currently trading above 20, 50, 100 and 200-DMA, indicating positional uptrend.
By closing above 10561, Nifty has completed the 50% retracement of the entire fall seen from 11171 to 9951. Above 10,638, next resistance for Nifty is seen at 10,705, which happened to be 61.8% Fibonacci retracement.
As far as support level is concerned, 10460 where 100-DMA is currently placed should act as a support level to watch out for.
Though Nifty has risen almost 7 per cent from the bottom, the relative strength index or the RSI on the daily charts has not turned overbought as of yet, which indicates further upside room for Nifty.
Other Indicators and oscillators have also been showing strength on the short-term charts.
Bank Nifty has been facing stiff resistance around its 100-DMA, which is currently placed at 25,373 odd levels. Technical setup for BankNifty is weak as compared to Nifty.
The recent top was made at 25,426 on an intraday basis and unless that is taken out, one should remain cautious in Bank Nifty. The support level for the index is seen at 24,600.
Here is a list of top three stocks which could give up to 15% return in short term:
Thomas Cook: BUY| Target Rs325 | Stop-loss Rs 260 | Return 15%
The stock price has given an ascending triangle breakout on the monthly chart indicating a continuation of an uptrend. In March 2018, the stock price broke out from the previous 8-month’s price consolidation.
The stock has been taking support around its 20-month exponential moving average or EMA which helped the stock to hold its uptrend.
Higher tops and higher bottoms on the weekly and monthly charts are intact which can be considered as a bullish sign. Oscillators like MACD and DMI are indicating strength in the existing trend. The stock price is on the verge of registering new all-time high above 292.
Rising volumes and the momentum indicates that in the short-term the stock price can move higher. Rounding bottom breakout is witnessed on the monthly line charts. We recommend buying Thomas Cook for the upside target of Rs 325, and keep a stop loss below Rs260.
NRB Bearing Ltd: BUY| Target Rs. 195 | Stop-loss Rs 168 | Return 10%
For the quarter ended Dec 2017, the stock gave a significant breakout from the multi-quarter high with a jump in volumes. The stock surpassed the crucial resistance level of 160 on a closing basis.
For the entire quarter of March 2018, the stock consolidated in the range of Rs150-180. In the current month of April 2018, the stock price seems to have resumed its uptrend is now on the verge of registering new all-time high above Rs182.
The short-term moving averages are trading above medium to long-term moving averages. Oscillators have been showing significant strength on the weekly and monthly charts. We recommend buying NRB Bearings for the upside target of Rs195, and keep a stop loss below at Rs168.
TAKE Solutions Ltd: BUY| Target Rs. 230 | Stop-loss Rs 190 | Return 12%
In the current month of April 2018, the stock surpassed the multi-month high of Rs190 odd levels. During this month, the stock hit a new all-time high at 215.80 with a rise in volumes.
The primary trend of the stock is bullish with higher tops and higher bottoms. The short-term moving averages are trading above long-term moving averages.
Oscillators are also indicating strength on the medium term charts. Appreciating dollar against rupee is also going to benefit the company like take solutions to perform better in the coming times. We recommend buying Take Solutions for the upside target of 230, keeping a stop loss below Rs190.
Disclaimer: The author is Technical Analyst, PCG Desk, HDFC Securities. 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.
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