Abhishek Mondal Guiness Securities
Benchmark indices are in the firm grip of the bulls as they continue to notch record highs. The Nifty is trading above its psychological 11,500 level and ended Tuesday’s trading session with a marginal gain of 0.17 percent at 11,570.90 on account of buying in some frontline blue-chip counters.
The Nifty is continuously seeing positive momentum and making higher highs and higher lows, which indicates it has the potential to move higher towards 11,637 and 11,781 (138.2 and 150 percent retracement levels of the January 29 to March 23 down move), with support seen around 11,500 and 11,450 levels, respectively.
The relative strength index (RSI) on the daily scale is trading at the overbought zone of 70.57. It is showing a bearish divergence as the Nifty has made fresh highs while the RSI is still trading below its recent peak.
The daily moving average convergence divergence is trading above the zero line with a positive crossover, which indicates the bias could remain sideways to positive in upcoming trading sessions. The volatility index ended down a percent at 12.90. A decrease in VIX suggests limited downside and a consolidated upmove in the market.
On the options front, maximum call open interest of 34.66 lakh contracts is seen at the 11,600 strike, followed by 11,500 strike, which now holds 31.97 lakh contracts. Maximum put open interest of 43.82 lakh contracts is seen at 11,400 strike, followed by 11,500 strike, which now holds 42.19 lakh contracts.
As per the options data, the support level for the Nifty has shifted higher compared to last week and the immediate support is seen around 11,500 to 11,400 levels, whereas 11,600 will act as an immediate hurdle in August expiry.
Here is a list of top three stocks that could return 6-11% in 1 month:
Torrent Power Ltd: Buy | Close: 249.60 | Target: Rs 270 | Stop loss: Rs 235 | Return: 8.15%
After making a marginal consolidation, the stock has given a breakout above Rs 246-247 levels on Tuesday with higher volumes.
The daily Relative strength index (RSI) showing positive momentum and (+) DI trading above (-) DI whereas OBV –on balance volume showing upward momentum and MACD trading around zero line with positive crossover, which indicates that the stock has the potential to move higher.
Traders can buy the stock around current levels and add on dips around Rs 242-244 with a stop loss below Rs 235 (closing) for the target of Rs 270.
Wockhardt Ltd: Buy | Close: 644.40 | Target: Rs 683 | Stop loss: Rs 619 | Return: 5.99%
In daily scale, the stock has given breakout from symmetrical triangle pattern around 625-626 on Monday with moderate volumes.
Daily momentum indicator- Relative Strength index (RSI) reading at 63.15 level, showing positive momentum and MACD trading around zero line with positive crossover whereas OBV — On Balance Volume is showing an upward momentum and (+) DI trading above (-) DI, signaling strength in the stock.
Traders can buy the stock in the range of Rs 642-645 with a stop loss below Rs 619 (closing) for a target of Rs 683
Tata Motors: Buy | Close: 268.80 | Target Rs. 310 | Stop Loss Rs. 252 | Return 11.61%
After a decent correction, the stock has bounced from lower levels and has given a breakout above the downward sloping trendline around 267-268 levels on Monday with higher volumes in daily scale.
We saw a positive divergence in Relative Strength Index indicator in daily scale along with positive crossover in MACD whereas positive DI trading above negative DI, which indicates decent upside expected in coming trading sessions.
Traders can accumulate the stock in a range of Rs. 266-269 for the upside target of Rs. 310 and a stop loss below Rs. 252 (closing basis).
Disclaimer: The author is Research Analyst, Guiness Securities. The views and investment tips expressed by investment experts on Moneycontrol are his own, and not that of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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