Dinesh Rohira
The Indian equity market continued with a winning streak on the weekly basis although it ended the last session on the lower note.
The Nifty50 index firmly managed to close above a psychological level of 10,500 last week despite the global volatility, and continued with positive momentum on its weekly price chart.
Although, the momentum was lost to bear regime during the closing week to touch 10,527 levels on the backdrop of a global and domestic factor, but it managed to recoup the loss to close at 10,564 levels with about 1 percent gain on weekly basis.
The rangebound trading levels on last day formed an indecisive ‘Doji’ candlestick pattern on the daily chart but continued with bullish candlestick pattern on weekly basis indicating a sideways level trade.
The relative strength index (RSI) level on weekly chart stood at 57 indicating an upward movement from earlier level coupled with a positive cue on MACD.
Based on a Fibonacci retracement, a support for the index is placed at 10,409 levels and resistance at 10,570 levels. Going ahead, in a week with F&O expiry coupled with earnings data, the rangebound trade for index remains intact from the price action of last closing session.
However, after decisively breaching upward from 10,400 and 10,500 levels, the momentum still hold for the bullish regime on weekly basis. Therefore, continuing with the stop-loss regime we maintain a rangebound trade for the index at 10,690 on upside and 10,430 levels on the downside.
Here is a list of top three stocks which could give up to 12% return in short term:
Chambal Fertilisers and Chemical Ltd: BUY| Target Rs226 | Stop-loss Rs190 | Return 12%
After making a marginal consolidation across 173 levels from 186 peaks, Chambal chemical traded on a positive trajectory on its long-term price chart.
The scrip touched the upper circuit in last trading session despite remaining muted in preceding trade and witnessed a significant volume growth in the current level, indicating a sustained trend.
On the daily price chart, after closing with about 6 percent the scrip made a strong bullish candlestick pattern indicating continued momentum.
Although the scrip remained on the oversold zone with weekly RSI level at 71, the MACD continued to signal positive trend on the current level.
With price trading above major levels, the scrip has a support at 177 levels and resistance level at 233. We have a BUY recommendation for Chambal Chemical which is currently trading at Rs. 201.85
Welspun India Ltd: BUY| Target Rs64 | Stop-loss Rs50 | Return 10%
Welspun India witnessed a substantial momentum during last week’s session after a forming a strong base across 51 levels and formed a reversal trend on its weekly price chart.
After entering the oversold zone, it decisively pulled back near 59 levels with about 11 percent gain on an intraday basis. Further, the scrip witnessed a 10x times volume growth in last week’s trade indicating a positive cue.
The scrip formed a bullish reversal candlestick pattern on its daily price chart after forming a ‘hammer’ kind of a pattern on the previous session which signals a positive momentum.
Further, a secondary momentum indicator witnessed a revival with weekly RSI level shifting upward coupled with positive crossover on MACD in near-term.
The support level for scrip is currently placed at 45 and resistance level from the upper band at 89. We have a BUY recommendation for Welspun India which is currently trading at Rs. 58.05
Eveready Industries Ltd: SELL| Target Rs. 310 | Stop-loss Rs350 | Return 5%
Eveready Industries continued to consolidate on its daily price movement on the backdrop of sustained selling on a higher level. Although it managed to touch 351 levels on an intraday basis but failed to sustain the level to breach below its crucial support level of 200-day EMA.
The scrip also witnessed a negative volume trend last week, and lost about 10 percent on a single day. The scrip formed a solid bearish candlestick pattern on its weekly price chart after breaching below 200-day EMA level which indicates a strong downtrend.
Further, the secondary momentum indicator continued to indicate negative signal with RSI at 38 level coupled with weak support from MACD trend.
The scrip is facing a resistance at 368 levels and support at 292 levels which will remain crucial for scrip. We have a SELL recommendation for Eveready Industries which is currently trading at Rs328.05
Disclaimer: The author is Founder & CEO, 5nance.com. 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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