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Last Updated : Oct 23, 2019 08:35 AM IST | Source: Moneycontrol.com

Podcast | Hot Stocks: 11,700 level likely to act as resistance for Nifty50

Traders should use any dip for creating fresh longs as the current trend is likely to remain bullish with Nifty moving towards 11,750-11,800 levels in the coming sessions.

Moneycontrol Contributor @moneycontrolcom
 
 
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Shitij Gandhi

After six days of consecutive gains, Indian markets took a pause on October 22 with Nifty ending well below 11,600 mark on the back of a sharp selloff in IT stocks led by Infosys which suffered its worst single-day drop in over six years.

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From the derivative front, 11,700 levels for Nifty should act as a strong hurdle as of now as call writers are seen adding hefty open interest build-up at 11,700 call strike.

From the technical front, the structure is still looking positive for the Nifty as far it is trading above 11,300 levels on broader charts.

The Nifty50 has almost witnessed a V-shaped recovery from 11,100 levels as once again the index is holding above its long-term moving averages on the daily interval.

We believe that, at the current juncture, traders should use any dip for creating fresh longs as the current trend is likely to remain bullish with Nifty moving towards 11,750-11,800 levels in the coming sessions.

Here is a list of top three stocks which could give 8-9 percent return in the next three-four weeks:

Dr Reddy's Laboratories: Buy | LTP: Rs 2,812 | Target: Rs 3,050 | Stop Loss: Rs 2620 | Upside 8.4 percent

After taking support at Rs 2,600 levels and at its 200-Day exponential moving average on the daily interval, the stock took a V-shaped recovery and once again surpassed Rs 2,800 levels.

On the technical charts, the stock is continuously maintaining above its short as well as long-term moving averages on the daily interval. It is seen trading in a rising channel with the formation of the higher-high and the higher-bottom patterns.

The positive divergence on the secondary oscillators suggests more upside into the prices in the coming sessions. Traders can accumulate the stock in the range of Rs 2,795-2,810 for the upside target of Rs 3,050 levels, and a stop loss below Rs 2,620.

Tata Global Beverage: Buy | LTP: Rs 281 | Target: Rs 307 | Stop Loss: Rs 265 | Upside 9 percent

The stock has been consistently maintaining its Bull Run and is seen trading in a rising channel on the daily as well as weekly charts.

However, for the last four to five weeks, some consolidation has taken place within a range of Rs 250-280. But, this week, a fresh breakout above the key resistance level of Rs 280 has been witnessed after a prolonged consolidation.

The breakout can add further buying momentum into the stock in the coming sessions as well. Traders can accumulate the stock in a range of Rs 280-282 for the upside target of Rs 307 levels with a stop loss below Rs 265.

Housing Development Finance Corporation: Buy | LTP: Rs 2,115 | Target: Rs 2,300 | Stop Loss: Rs 1,980 | Upside 8.7 percent

For the last three months, the stock has been seen trading in a downward sloping channel with a formation of lower highs and lower bottoms on the daily charts as it fell from Rs 2,350 levels and tested Rs 1,950 levels.

However, after consolidating in a range of Rs 1,950-2,050 for more than eight trading sessions, it has managed to reclaim above its long-term moving averages on the daily charts along with breakout above the falling trend line of descending channel.

Moreover, the stock has also formed a rounding bottom pattern at lower levels which suggests more upside into the prices moving forward.

Traders can accumulate the stock in the range of Rs 2,100-2,115 levels for the upside target of Rs 2,300 levels with a stop loss below Rs 1,980.

(The author is a Senior Research Analyst, SMC Global Securities Ltd)

Disclaimer: The views and investment tips expressed by investment experts 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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First Published on Oct 23, 2019 08:35 am
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