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Last Updated : May 27, 2019 10:14 AM IST | Source: Moneycontrol.com

Podcast | Stock picks of the day: Gap area of 11,591-11,426 formed on May 20 is crucial support for the Nifty

The focus is now likely to shift towards the mid- and smallcap universe as we expect the party to begin after a long underperformance

Sameet Chavan
 
 
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Last week was a splendid one for our markets and the kind of comeback we made in terms of the rally seen in benchmark indices is quite remarkable. Moreover, global markets had no influence over it as the rally was mainly led by domestic factors.

The first and the last day of last week had some notable developments. On May 23, there was massive volatility with wild swings being witnessed. We are back to the comfort zone now courtesy of the spectacular upsurge on May 24.

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This move was crucial for our market as it negated the possibility of forming a ‘Shooting Star’ pattern on the weekly chart, which would have probably turned ominous if we had a close below 11,750-11,700 levels.

Going forward, the gap area of 11,591.70-11,426.15 formed on May 20 is now likely to act as a sheet anchor and we do not expect the Nifty to fall below this level in the near future.

Since we have confirmed a breakout on the line chart in the weekly timeframe, we expect the index to go beyond the 12,000 mark quite soon.

Last week, we had clearly stated that the midcap index was in the last phase of its time as well as price-wise correction. We have already seen a huge leap from the lows and expect further legs to unfold, which will eventually bring smiles on the faces of many traders/ investors.

Going forward, we may not see the similar kind of outperformance from previous index drivers and the focus is now likely to shift towards the mid- and smallcap universe as we expect the party to begin after a long underperformance.

Here is a list of top two stocks that could offer up to 10 percent return in the next one month:

HSIL: Buy| LTP: Rs. 286.85| Target: Rs 317| Stop Loss: Rs 269.40| Upside 10%

After a slumber phase for more than a year for the midcap and smallcap basket, the tide now seems to have turned upwards. This stock after forming a base in the recent past has now broken above the recent consolidation and is now gearing up for a strong upward rally in the near-term.

The said breakout from the consolidation is supported with a good increase in volume and strong positive candle.

In addition, momentum oscillator i.e. RSI is in positive zone supporting the optimistic view. Thus, we recommend buying at current levels for a target of Rs 317 and the stop loss should be fixed at Rs 269.40.

Raymond: Buy| LTP: Rs 852.20| Target: Rs 938| Stop Loss: Rs 804| Upside 10%

Recently, we witnessed a sheer outperformance from this traders’ favourite high beta midcap names. The stock remained sideways with no real participation in the broader market destruction.

Today, when midcap universe started showing signs of revival, this stock showed its supremacy by clocking colossal move to surpass its recent congestion zone convincingly.

Looking at the volume activity and another trend following indicators which are pointing upwards, we expect the stock to give decent move in days to come. We recommend buying at current levels for a target of Rs 938 and the stop loss should be fixed at Rs 804.

The author is Chief Analyst- Technical & Derivatives, Angel Broking

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Note: The copy was updated to reflect the correct byline. 
First Published on May 27, 2019 08:47 am
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