On November 6, the benchmark index witnessed a sharp V-shaped rally on the intraday day basis after witnessing a negative opening and closed a day at 11,966.05 with a gain of 48.85 points.
It formed a bullish candle which had shown a positive thrust on a daily charting hinting for strong bullish momentum ahead. After October 29, the index was trading in a narrow range with continuous closing above 11,700 levels.
On the daily timeline, the index has vanished its previous day’s bearish candle and has opened the broader market range.
The majority of sectoral indices are contributing to the move, and we feel banking and Auto could outshine others in the near future.
Due to the recent breakout in the Nifty50, its key technical indicators are in favour of bulls. Hence, our bullish view will remain intact, but near-term consolidation cannot be ruled out before hitting a lifetime high.
The index is nicely poised above its 20-, 50-, 100-day Exponential Moving Averages (EMA) on the daily interval which is positive for the Indian bourses.
In case Nifty50 violates 11,850 mark, higher-level profit booking will take place, where the index will find support around its horizontal trend line (placed around 11,700 mark).
On the higher side, the index will face major hurdles around its lifetime high of 12,103 marks. Once Nifty sail above the lifetime high, 12,300 will be the new target to watch out for.
Here is a list of top three stocks which could give 8-11% returns in the next 3-4 weeks:
L&T Finance Holdings: Buy | LTP: Rs.95.85 | Target: Rs 104.50 | Stop Loss Rs.91 | Return 9 percent
On the daily chart, L&T Finance Holdings has witnessed a breakout of 'Falling Channel Pattern', which is a bullish reversal in nature. The stock has formed 'Bullish Butterfly Harmonic Pattern' on the weekly interval and currently trading above its PRZ (potential reversal zone) levels.
The stock is trading above its 50 & 20-Day EMA on the weekly time frame, which is positive for stock in the medium-term.
The Momentum Oscillator RSI (14) has given a breakout from the Symmetrical Triangle Pattern & currently reading above 55 levels with positive crossover.
In terms candlestick pattern, the stock saw three White Shoulder candles on the weekly chart, which is a bullish reversal in nature.
Traders can accumulate the stock on dips in the range of Rs 95 -97 for the target of Rs 104.50 with a stop loss below Rs 91 on the daily closing basis.
Tech Mahindra: Buy | LTP: Rs 771 | Target: Rs 856 |Stop Loss: Rs 725 | Upside 11 percent
After a recent consolidation, Tech Mahindra has witnessed a breakout from the 'Cup & Handle Pattern' on the weekly time line.
Currently, prices are trading above its trendline support which is positive for the counter. The stock is trading above its 20-, 50-, 100-day EMA, which is a bullish sign for the prices.
Momentum oscillator RSI (14) observation is suggesting a reversal in trend from bearish to bullish as indicator reversed from an oversold zone which is currently reading above 60 levels with positive crossover on the weekly time line.
The MACD indicator is reading above its line of polarity with positive crossover, which indicates bullish momentum should continue for the near future.
Traders can accumulate the stock on dips in a range of Rs 767 - 775 for the target of Rs 856 with a stop loss below Rs 725 on a daily closing basis.
Heidelberg India Ltd: Buy| LTP: Rs.201.50 | Target: Rs 217.50 |Stop Loss: Rs 193.50 | Upside 8 percent
Heidelberg, after hitting Rs 215 on May 29, was consolidating on a muted note for above six months. On November 6, prices gave a breakout of an upward falling trendline on the daily chart.
The stock is trading above its 20-, 50-, 100-day EMA, which is a bullish sign for the prices. In the current momentum, prices are expected to hit a lifetime and expecting to trade in uncharted territory.
Weekly RSI (14) has shifted above 50 levels with positive crossovers, which is positive for the stock. Traders can accumulate the stock on dips in a range of Rs 200 - 203 for the target of Rs 217.50 with a stop loss below Rs 193.50 on a daily closing basis.
(The author is Technical Research Analyst, Bonanza Portfolio 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.