Rohan Patil
The Nifty50 has now moved below its recent swing low which was placed at 11,625 and, so far, sustained below it. The Nifty has given a smaller trend-line breakdown on the daily chart on July 10.
The recent movement is an indication for rising pessimism among the participants. Going forward, the huge gap which was left open during exit poll day is likely to get filled.
The candlesticks of the previous two-days - Hammer and Inverted Hammer candles - suggest a bullish reversal. Henceforth, bounce back from the current level cannot be ruled out.
The medium-term trend still remains positive as the benchmark index is trading in a Higher High and Higher Low formation in a Rising Channel pattern.
A decisive break below 11,400 may drift prices below 11,100 which will act as near-term support for the Nifty.
On the higher end, 11,600 is acting as a change of polarity as the earlier support has become resistance. A sustained trade above 11,600 may induce rally towards 11,850 – 12,000.
Here is a list of top three stocks which could give 7-8 percent return in the next three-four weeks:
Power Grid: Buy| LTP: Rs 205.30 | Target: Rs 221|Stop Loss Rs.195|Upside 8 percent
After a prolonged consolidation, the stock has managed to close above its trend-line resistance on a higher time frame (weekly) charts.
An Ascending Triangle Pattern breakout has witnessed in the weekly chart, and prices are sustaining above its trend-line support.
The latest rise in stock has pushed prices above its 50- and 100-days EMA on the weekly timeline. On the weekly chart, RSI (14) is reading above 60 levels with a bullish crossover.
Traders can accumulate the stock in the range of Rs 204 – 206.50 for the target of Rs 221 and a stop loss below Rs 195.
Tata Motors: Sell| LTP: Rs 151.65 | Target Rs 140|Stop Loss Rs.158| Upside 7.5 percent
Prices are trading in a lower high and a lower low formation since April 22. Currently, prices are trading below its Head and Shoulder neckline resistance on the daily chart.
All the major moving averages are trading below the current prices. The RSI (14) is also in a bearish range shift and reading below 40 with negative crossover.
Traders can sell the stock in the range of Rs 150.50 – 152.50 for the target of Rs 140, and a stop loss above Rs 158.
Apollo Hospitals: Buy| LTP: Rs 1,318 | Target: Rs 1,425|Stop Loss: Rs.1,265| Upside 8.1 percent
The stock has given a breakout above the horizontal trend-line and later retested it on the daily charts. Every time the stock has retested its horizontal trend-line, a decent rally in prices was observed.
Currently, 50-days exponential moving average is acting as a crucial support for the prices. Indicators are still positive on the weekly chart, and there is optimism among the participants.
Traders can accumulate the stock in the range of Rs 1,314 – Rs 1,325 for the target of Rs 1,425 and a stop loss below Rs 1,265.
(The author is Technical Analyst, Bonanza Portfolio Ltd)
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