We expect the uptrend to continue initially towards 12,000 and then towards 12,300 levels.
Nifty touched a new all-time high of 11,810.95 and closed at 11,787 levels on April 16. The rally was led by banks, capital goods, energy and FMCG stocks.
However, broader market indices underperformed the benchmark with BSE Midcap and Smallcap gaining 0.12 percent and 0.37 percent, respectively.
The Nifty after consolidating for two weeks below the previous high of 11,760 gave a breakout on the upside and closed at a new all-time high.
The index formed a bullish candle after a gap-up opening indicating follow-through action. We expect the uptrend to continue initially towards 12,000 and then towards 12,300 levels.
On downside, recent consolidation low of 11,550 is now pivotal support with near support at 11,680 for the market.
Here is a list of top 3 stocks that could give 12-20% return in the next 1 month:
ICICI Bank: Buy| LTP: Rs 407| Stop Loss: Rs 385| Target: Rs 475| Upside 16%
The stock witnessed breakout in early March from a bullish cup handle pattern on the weekly chart. Since then, for the last four weeks, the stock had been trading in a range of Rs 400 and Rs 380 odd levels at its all-time high levels.
On Tuesday, the stock gave a breakout from the short-term consolidation on strong momentum and good volumes. The price has given a breakout on the upside from Bollinger Band with expansion of bands indicating continuation of trend in the direction of breakout on daily chart.
The Average Directional Index (ADX) line indicator of trend strength has turned up from the equilibrium level of 20 on weekly chart.
Relative strength index and Stochastic have given positive crossover with their respective averages on the daily chart. Thus, stock can be bought at current levels and on dips to 400 with a stop loss below Rs 385 and a target of Rs 475 levels.
Vinati Organics: Buy| LTP: Rs 1,742| Stop Loss: Rs 1,675| Target: Rs 1,950| Upside 12%
The stock has been in an uptrend for the last one year forming higher tops and higher bottoms on the weekly chart. After hitting a high of Rs 1,727 in December last year, the stock has been consolidating below it.
The stock touched a new all-time high on closing basis on Tuesday. ADX line indicator of trend strength has turned up from equilibrium level of 20 on the daily chart.
MACD line has given a positive crossover with its average on the weekly chart. The Relative strength index and Stochastic have given positive crossover with their respective averages on the daily chart.
The stock can be bought at current levels and on dips towards Rs 1,720 with a stop loss below Rs 1,675 and a target of Rs 1,950 levels.
Indian Hotels Company: Buy| LTP: Rs 154| Stop Loss: Rs 146| Target: Rs 185| Upside 20%
The stock has seen a major consolidation between Rs 161 and Rs 120 levels for the last 15 months. On the shorter term time, it has formed a round bottom pattern over a four-month period and saw a breakout in March to touch a high of Rs 161.
Breakout was on strong momentum and high volumes which indicates buying participation in the stock. The recent correction from the high has been on below-average volumes and taken support at the 21-day exponential moving average.
Stochastic has given positive crossover with its average on daily chart suggesting correction is over stock is resuming its uptrend. Thus, stock can be bought at current levels and on dips to Rs 151 with stop loss below Rs 146 for target of Rs 185 levels.
(The author is Head of Technical and Derivatives, Sanctum Wealth Management)Disclaimer: The views and investment tips expressed by investment expert 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.The Great Diwali Discount!
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