Podcast | Stock picks of the day: 'A breakout above 11K on Nifty to help upward momentum'

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Shitij Gandhi

The benchmark index began 2019 on a positive note with Nifty50 once again reclaiming 10,900 mark on a closing basis. The up move was majorly supported by a sharp rally in HDFC twins and other banking stocks.

On the derivatives front, Call writers at 11,000 strike are still holding the second highest OI of nearly 26 lakh shares after 11,200 call strike which will act as the near-term resistance.

But, since the beginning of January series, we have observed that Put writers seem to be more active in 10,800 and 10,700 strikes which suggest that Nifty has strong support near this area.

We expect that the current trend is likely to continue towards the north and on the technical front any break above 11,000 levels will definitely add further buying momentum towards 11,100 levels in Nifty.

Here is a list of top three stocks which could give 7-10% return in the next one month:

DCB Bank: Buy| Target: Rs 179| Stop Loss: Rs 156| Return 8%

After a V-shaped recovery from Rs 148 levels, this week stock has given a fresh breakout above its 200 days exponential moving average on daily charts.

On the technical front, a breakout above the bullish flag pattern can also be observed above the Rs 169 levels. Traders can accumulate the stock in a range of Rs 165-169 for the upside target of Rs 179 levels with a stop loss below Rs 156.

ICICI Bank: Buy| Target: Rs 386| Stop Loss: Rs 345| Return 7%

For more than six weeks, the stock has been trading in a broader range of Rs 340-365 and is maintaining well above its short and long-term moving averages.

At the current juncture, the stock formed an inverted head and shoulder pattern on the daily interval chart. Additionally, the positive divergences on secondary indicators are pointing toward upward movement in prices.

So, traders can accumulate the stock in a range of Rs 360-364 for the upside target of Rs 386 levels and a stop loss below Rs 345.

Escorts: Buy| Target: Rs 785| Stop Loss: Rs 660| Return 10%

The stock witnessed a V-shaped recovery from Rs 585 levels in the recent past to reclaim Rs 700 levels in a short span of time. However, after that prices seen consolidating in range of Rs 660-710 from last two weeks.

The stock witnessed a fresh breakout above its 100-days exponential moving average on the daily interval along with marginally higher volumes.

Traders can accumulate the stock in a range of Rs 710-720 for the upside target of Rs 785 levels and a stop loss below Rs 660.

(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.