After witnessing some gains last week, the Nifty failed to remain in control as it decisively closed below the 10,950 mark on August 13. The market breadth was tilted in favour of bears on the back of weak global cues.
On the derivative front, Call writers were active in 11,100 and 11,000 strikes along with Put unwinding.
The market undertone is likely to remain bearish in the coming sessions as well. We are continuously witnessing a short build-up into prices which could weigh on the markets.
On the technical front, any decisive move below 10,850 mark in the Nifty could trigger a fresh round of selling while on the higher side, 11,100 levels should act as a key resistance area.
We are hopeful that as long as we trade below 11,100 levels on the Nifty, the current trend is unlikely to change and the index is likely to move towards 10,750 levels amid high volatility.
Here is a list of the top three stocks which could give 7-12 percent return in the next three to four weeks:
Reliance Nippon Life Asset Management: Buy| Target: Rs 267| Stop Loss: Rs 225| Upside 11 percent
The stock has been constantly trading well above its short and long term moving averages on the daily as well as weekly interval charts with the formation of higher highs and higher bottom pattern.
This week, the stock has given a fresh breakout above the key resistance levels of Rs 242 along with marginally higher volumes which suggest that upside is likely to continue in the coming sessions.
Traders can accumulate the stock in the range of 240-245 for the upside target of 267 levels, and a stop loss below Rs 225.
Bharat Electronics: Sell| Target: Rs 86| Stop Loss: Rs 98| Downside 8 percent
The stock has been consistently trading well below its long and short-term moving averages on the daily as well as weekly interval charts.
However, after testing Rs 97 levels on the higher side, the stock once again fell back towards Rs 92 levels in the August 13th session and gave a breakdown below the rising wedge pattern which is generally traded as a bearish pattern in the downtrends.
The negative divergences on the secondary oscillators also point towards more downside in the coming sessions. Traders can sell the stock in the range of Rs 93-94 levels for the downside target of Rs 86, and a stop loss above Rs 98.
Adani Ports and Special Economic Zone: Sell| Target: Rs 339| Stop Loss: Rs 380| Downside 7 percent
In the recent past, the stock has given a breakdown below its 200-DEMA on the daily interval charts which was placed at Rs 385 levels. The stock entered into a bearish territory on the short-term charts.
In the August 13th session, the stock witnessed a fresh breakdown below the key support level after prolonged consolidation.
On the derivative front as well, the stock seems to have added short build up into the prices which suggest more downside in the upcoming sessions.
Traders can sell the stock in the range of 362-365 levels for the downside target of 339 levels, and a stop loss above Rs 380.
The author is a Senior Research Analyst, SMC Global Securities
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.