Going forward, 11,100 will act as immediate support for the Nifty, with 11,550 acting as next resistance, which is previous weeks high for the benchmark index
Bears gripped the market on October 10 after a strong rally seen in the preceding session. Benchmark indices have shed almost 50 percent of the gains made on October 9.
The Sensex gave up 38,000, as it fell 297 points to 37,880, and the Nifty closed 78 points lower at 11,234 on October 10.
We expect the markets to retrace some of the losses seen last week, but at the same time do not expect the recent highs to be taken out in the short term.
Going forward, 11,100 will act as immediate support for the Nifty, with 11,550 acting as next resistance, which is previous weeks high for the benchmark index.
Here is a list of top three stocks that could return 3-7 percent in the next 3-4 weeks:
IndusInd Bank: Sell| CMP: Rs 1,228| Target Rs 1,196 |Stop Loss: Rs 1375|Downside 3%
Indusind Bank has posted a weekly trendline breakdown which was placed at around Rs 1450 odd levels. The price is currently rolling below all its major exponential moving averages (50, 100, 200-days) on weekly intervals.
We have seen a ‘Lower High and a Lower Low’ formation which is well intact in prices. The previous week bearish candle has almost engulfed its prior eight-week candle, which is a negative sign for the stock.
Indicators and oscillator aren't looking promising as the majority of them are trending lower with negative crossover on the cards. Going ahead, any rally in the stock should be considered for the fresh shorting opportunity for the counter.
The stock may be sold in the range of Rs 1314 - 1303 for the target of Rs 1,196, and a stop loss above Rs 1,375.
Hindustan Unilever: BUY| CMP: Rs.1979 | Target: Rs 2,120 |Stop Loss: Rs 1,849|Upside 7%
After the recent consolidation breakout, Hindustan Unilever is sustaining above its trendline support on the weekly interval chart.
Prices are consistently respecting its 50-days exponential moving averages (EMA) on the weekly chart which is currently placed at Rs 1,800 level.
The stock registered a ‘Higher High, and Higher Low’ formation which is well poised to take the prices to all-time high levels in the near future. Weekly RSI (14) is reading above 60 levels with positive crossover on the cards.
Traders can accumulate the stock in the range of Rs 1,942 – 1,958 for the target of Rs 2,120, with a stop loss below Rs 1,849.
Indraprastha Gas: BUY| CMP: Rs 370| Target RS.397.50 |Stop Loss Rs.340|Return 7%
A recent up move has created optimism in the prices, which has pushed the IGL above its trendline resistance. On the weekly interval chart, we have witnessed a breakout from the “CUP & HANDLE PATTERN” which is placed at Rs 347 levels.
A spurt in prices has made the stock settle above its 50 & 100 exponential moving averages (EMA) on the weekly time frame, which is a positive sign for the stock.
Indicator and oscillator are looking promising as a majority of them are trending higher with positive crossover on the cards.
Traders can accumulate the stock in the range of Rs 359 - 363 for the target of Rs 397.50, and a stop loss below Rs 340.
(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.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.