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Last Updated : Jan 10, 2019 08:20 AM IST | Source: Moneycontrol.com

Podcast | Stock picks of the day: Nifty could remain in upward consolidation mode

On the higher end, the Nifty may move towards 11,000. On the other hand, support is pegged at 10,700

Moneycontrol Contributor @moneycontrolcom
 
 
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Rupak De

Bonanza Portfolio

The Nifty50 started higher and remained sideways during the first half of Wednesday’s session. However, during the second half, we observed a spike in volatility.

At the close of the session, the Nifty closed with a ‘Doji’ formation which is to be seen as indecisiveness at this position. On the daily chart, the Nifty has been moving within an ascending triangle where the index has recently found support at the lower side of the triangle.

In addition, 50-EMA is sustaining above its 200-EMA on the daily frame which is a Golden cross. The daily momentum indicator, such as RSI (14) has entered in a bearish crossover and falling with a current reading of 54.68.

On the options front, maximum open interest position is visible in 11,000 CE (38.13Lakh shares) and 10,500 PE (41.67Lakh shares); followed by 11,200CE (34.16Lakh shares) and 10,000 PE (36.21Lakh shares).

The index is expected to continue remaining in the upward consolidation. On the higher end, the Nifty may move towards 11,000. On the other hand, support is pegged at 10,700. A breakdown below 10,700 may take Nifty towards 10,530.

Here is a list of top three stocks which could give 7-12% return in the next 1 month:

Tata Motors: Buy| CMP: Rs.183.05 | Target: Rs 198| Stop Loss Rs.176| Return 10%

The stock has given a falling wedge breakout on the daily frame which suggests that the optimism in the stock has increased significantly and the trend has reversed now.

In addition, the stock price has moved above the 50-EMA for the first time in the last four month. On the daily chart, the momentum indicator RSI (14) is in positive crossover and rising.

Traders can accumulate the stock in the range of 180-185 for the target of 198 and a stop loss below 176.

ITC: Buy| CMP: Rs.290.40 | Target: Rs 312| Stop Loss: Rs.279| Return 7%

On the daily chart, it can be observed that price has given a symmetrical pattern breakout which indicates a price may move up in the short-term as the trend has revered.

On the weekly frame, the stock has moved above its recent consolidation pattern. The momentum indicator RSI (14) is in positive crossover and rising on the weekly frame.

Traders can accumulate the stock in the range of 287-292 for the target of 312 with a stop loss below 279.

SPARC: Buy| CMP: Rs.186.50 | Target: Rs 209| Stop Loss Rs.177| Return 12%

The stock, after a sharp correction, is seen to be consolidating at the lower levels. The momentum indicator RSI (14) is in the oversold zone for a prolonged period; in addition, it is in positive divergence with the price with the price which suggests a reversal in the price may be witnessed in the short term.

Traders can accumulate the stock in the range of 184-187 for the target of 208 and a stop loss below 177.

(The author is a Technical Research Analyst at Bonanza Portfolio)

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.
First Published on Jan 10, 2019 08:20 am
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