Achin Goel
The Nifty has been in a steady uptrend since it made a low of 9,951 on March 23. It has moved above its 61.80 percent retracement level (10,706) from its lifetime high of 11,171 to the low 9,951. This suggests reversal of the previous downtrend.
A positive crossover of 50-exponential moving average (EMA) and 200-EMA is expected to provide bullish sentiment to the index. Prices have also been hovering comfortably above both averages for several trading sessions.
The Relative Strength Index (RSI) (14) recorded a bullish crossover on the weekly chart with a current reading at 60.76. This suggests possibility for further upsides in the short term. The momentum indicator is moving in alignment with the price, with no negative divergence.
Another momentum indicator, moving average convergence divergence (MACD) is in the bullish crossover on the daily chart. On the higher end, sustained trades above 10,706 levels may induce a rally towards 10,900-11,000 levels in the short-term. On the lower end, immediate supports are pegged at 10,500 levels.
Here is a list of top five stocks which could give up to 15% return in the short term:
Unichem Laboratories Ltd: Buy| Target: Rs 321| Stop loss: Rs 269|Return 12%
On the daily chart, the stock has surpassed above its previous inflection point which suggests growing optimism in the stock. In addition, on the daily chart, an Ugly Double Bottom formation is visible.
The momentum indicator, RSI (14) has moved out of the oversold zone and currently in a bullish crossover which suggests a positive sentiment in the short term.
Traders can accumulate the stock in the range of Rs 280-287 for the target of Rs321 and a stop loss below Rs 269.
Alkem Laboratories Ltd: BUY| Target: Rs 2270|Stop loss: Rs 1903|Return 12%
The stock has been in an uptrend since it gave a breakout from the consolidation pattern. On the weekly chart, a large green candle got formed after a ‘Morning Doji Star’ pattern which indicates a bullish reversal.
In addition, the price has moved above 50EMA (exponential moving average) as well as 200 EMA on the daily chart. Bullish crossover in the daily RSI (14) also confirms the positive momentum in the stock.
Traders can accumulate the stock in the range of Rs 2,000-2,025 for the target of Rs 2,270 and a stop loss below Rs 1,903.
Castrol India Ltd: BUY| Target: Rs 225| Stop loss: Rs 188| Return 12%
On the daily chart, the stock has given a breakout from its range bound pattern. After the breakout, a surge in volumes is visible.
The stock price has moved and closed above its 200-DMA (daily moving average). Moreover, the momentum indicator, such as daily RSI (14) is in bullish crossover and rising.
Traders can accumulate the stock in the range of Rs 195-200 for the target of Rs 225 and a stop loss below Rs 188.
Ujjivan Financial Services Ltd: Buy| Target: Rs 485|Stop loss: Rs 394|Return 15%
The stock has given a falling trendline breakout on the weekly chart which indicates a reversal of the previous sideward trend. On the daily chart, the price has been trading comfortably above the 50 EMA as well as 200 EMA.
Momentum oscillator, RSI (14) is in bullish crossover and rising on the weekly chart indicating a positive range shift in the price momentum. Traders can accumulate the stock in the range of Rs 415 - 422 for the target of Rs 485 and a stop loss below Rs 394.
SBI Life Insurance Co Ltd: BUY| Target RS.830|Stop Loss Rs.699|Return 12%
On the daily chart, the price has moved above the falling trendline which suggests the reversal of the previous falling trend. A breakout of the trendline was backed by a surge in volume.
The stock price has so far sustained above 50-EMA which is an indication of a short-term bullish trend. Moreover, a momentum indicator, RSI (14) has entered in a bullish crossover on the weekly chart.
Daily as well as weekly MACD has moved above their signal line which again is a positive set up. Traders can accumulate the stock in the range of Rs 735 - 745 for the target of Rs 830 with a stop loss below Rs 699.
Disclaimer: The author is Head of Wealth Management and Financial Planning, Bonanza Portfolio Ltd. 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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