Hadrien Mendonca
Bank Nifty has hit fresh record high and has spearheaded the current phase of the rally. After breaking out from a larger ‘Cup and Handle’ pattern and a ‘Flag’ pattern on the weekly charts, the index has shot up significantly.
With the breakout confirmed, we believe that the index has the potential to rally another 2,500 points in the coming months.
The Nifty50 has broken out from a rising channel pattern which is likely to lift the index towards its previous all-time highs. The strategy should to "Buy on Decline".
Here is a list of top three stocks which could give 5-9% return in next 1 month:
DLF: Buy| Target: Rs 218| Stop Loss: Rs 194| Upside 8%
The stock has shown immense strength in the recent past and has broken out from the falling channel pattern on the weekly chart.
It has also surpassed its 200-weekly exponential moving average. Projections indicate that the stock has the potential to rally towards Rs 218 in the medium-term.
Karnataka Bank: Buy| Target: Rs 140| Stop Loss: Rs 122| Upside 9.3%
The stock rallied smartly and has broken out from an inverse head and shoulder pattern on the weekly chart. The breakout has been accompanied with a smart uptick in traded volumes.
The stock has also witnessed golden crossovers on the moving average on the daily chart. Projections indicate that the stock has the potential to rally towards Rs 140 levels in the medium-term.
Reliance Capital Mar Futs: Sell| Target: Rs 158.5| Stop Loss: Rs 172| Downside 5%
The stock has been consolidating for the past six trading sessions and has finally broken down from a consolidation pattern.
The fall has also been accompanied with a smart uptick in traded volumes. The negative crossovers on the Relative Strength Index (RSI) further accentuates our bearish stance on the stock.
We expect the stock to decline lower towards its potential target of Rs 158.5 in the near-term.
(The author is a Senior Technical Analyst, IIFL)
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