A sustained trade above 10,800 may induce a rally towards 10,950-11,050 where the index may once again face resistance
The Nifty started Wednesday on a positive note, tracking gains in other benchmark indices across the globe. Throughout the session, the market traded with a positive bias. On the higher end, the index moved above the 61.80 percent Fibonacci retracement level of its previous fall from 10,941 to 10,333.
We find that the index is approaching the rising wedge, which it broke in its previous fall. The daily momentum indicator, RSI (14) has entered a bullish crossover, which suggests waning bearishness.
On the options front, maximum open interest was seen at the 11,000 strike price call option (43.58 lakh units) and the 10,000 strike price put option (53.17 lakh shares).
Going forward, the bias is expected to remain sideways. On the higher end, the Nifty may face resistance around 10,800.
A sustained trade above 10,800 may induce a rally towards 10,950-11,050 where the index may once again face resistance. On the other hand, a failure to sustain above 10,600 may result in the market correcting again.
Here are 3 stocks that could return 7-8% in the next 1 month:
TVS Motors: Buy| LTP: Rs 570.60 | Target Rs 620| Stop Loss Rs 547| Return 8%
On the daily chart, the stock has given a Symmetrical Triangle pattern which suggests a sudden spike in the optimism in the counter. In addition, the stock has moved above its previous swing high of smaller degree on the daily chart.
Moreover, the price has moved above its 61.80% Fibonacci retracement level of the previous fall from 604.75 to 478.70.
The daily momentum indicator is in a bullish crossover with a current reading of 59.49. Traders can accumulate the stock in the range of 565–575 for the target of 620 and a stop loss below 547.
NTPC: Buy| LTP: Rs 140.70 | Target: Rs 150.50 | Stop Loss: Rs 136| Return 7%
On the daily chart, the stock has given a breakout above the falling trend line which suggests a reversal in the trend.
The daily strength indicator is seen coming out from the oversold zone with a bullish crossover. Also, the daily RSI is in a bullish divergence with the price which suggests momentum is likely to change to positive.
Traders can accumulate the stock in the range of 245-250 for the target of 270 with a stop loss below 237.
GE T&D: Buy| LTP: Rs 247.35| Target Rs 270| Stop Loss Rs 237| Return 8%
The stock on the daily chart has signaled a trend reversal through a falling wedge breakout. Also, in its recent movement, the stock has surpassed its 50-DMA which is currently placed at 242.11.
The daily RSI (14) is in bullish divergence which suggests the momentum is likely to change to positive in the near to short term. Traders can accumulate the stock in the range of 245-250 for the target of 270 and a stop loss below 237.Disclaimer: The author is a Technical Research Analyst at Bonanza Portfolio Ltd. 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.