Clearly it’s a sell on rallies market, as both technical parameters and derivative data are pointing towards limited upside in prices moving forward.
Indian markets registered sharp cuts on the first trading session after the Union Budget as Nifty slipped well below 11,600 mark on the back of a heavy selloff in bluechip stocks.
However, in the July 9 session, Nifty spot somehow managed to take support at its 100-DEMA and ended the day above 11,550 marks.
From derivative data, the call writers were active in 11,600 and 11,700 strikes along with marginal put writing in 11,500 strikes.
In the coming sessions, we believe that, as Nifty is trading below 11,700 mark, the market undertone is likely to remain bearish. We may witness some consolidation in the range of 11,450-11,650 with some volatility on cards.
However, at the current juncture, clearly it’s a sell on rallies market as both technical parameters and derivative data are pointing towards limited upside in prices moving forward.
Here is a list of three stocks which could give 7-12 percent return in the next 3-4 weeks:
Majesco: Buy| Target: Rs 611| Stop Loss: Rs 510| Upside 12 percent
The stock has been consistently trading above its short and long-term moving averages, along with constant buying at support levels.
This week, we have observed a fresh breakout into the prices above the W-pattern on the daily charts alongside marginally higher volumes which suggest for more upside into prices moving forward.
Traders can accumulate the stock in the range of Rs 545-555 for the upside target of Rs 611 levels and a stop loss below Rs 510.
Sobha: Buy| Target: Rs 622| Stop Loss: Rs 520| Upside 11 percent
In the recent past, the stock took a breakout above 510 levels and tested Rs 580 levels in a short span of time. At the current juncture, after testing the previous breakout levels of Rs 510, it took a V-shaped recovery to regain the momentum above Rs 565 levels, a higher high and higher bottom pattern.
Traders can accumulate the stock in the range of Rs 560-570 for the upside target of Rs 622 levels with a stop loss below Rs 520.
Indraprastha Gas: Sell| Target: Rs 276| Stop Loss: Rs 310| Downside 7 percent
After testing Rs 350 levels in the recent past, the stock witnessed selling pressure at higher levels as once again prices fell toward its 200-days exponential moving average on daily charts with a series of decline over a few weeks.
At the current juncture, the stock has given a break down below its long term trend line of the rising channel and once again fall below 200 DEMA which is placed at Rs 297 levels can bring back the selling pressure into the stock in coming sessions.
Traders can sell the stock below Rs 297 levels for the downside target of Rs 276 levels with a stop loss above Rs 310.
(The author is a Senior Research Analyst, SMC Global Securities Ltd.)Disclaimer: The views and investment tips expressed by investment experts 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.