Nifty is likely to remain in the range of 10,740–11,100 and a move on either side would dictate the further trend.
The Nifty has the potential to retest the peak of 11,141 if the low of 10,740 remains intact in the coming week. In line with the forecast, the index attempted to meet the 11,100 mark but just fell short this week.
Now, the current price action has helped the index convincingly cross the previous week’s high after 10 weeks.
This is an encouraging sign for the bulls, which indicates that the bottom of 10,740 should hold good for some more time and the Nifty could reach higher levels.
On the contrary, the daily chart of Nifty future indicates that the recent rally was backed by low volumes, which could probably lead to some profit booking at current levels.
Thus, traders are advised to wait and avoid aggressive long bets until we see a significant buying interest which could take the index higher.
A breakout above 11,141 could lead to an upside towards 11,300–11,400. However, a breach of 10,740 would bring the bears back on the front seat, which will pull the index back to the 10,600 level.
To conclude, for the time being, the Nifty is likely to remain in the range of 10,740–11,100 and a move on either side would dictate the further trend.
Here is a list of top three stocks which could give 4-13 percent return in the next three-four weeks:
UPL: Sell| LTP: Rs.567 | Target: Rs 535 |Stop Loss: Rs.591 | Downside 7 percent
From July 2019 to August 2019, UPL witnessed a severe fall from Rs 670 to Rs 498 without any meaningful correction.
Since then the stock has been recovering and is now back in the Rs 590 zone and is facing pressure near the placement of the 200-Day Simple Moving Average.
The price action has taken a shape of “Rising Wedge” pattern, which generally occurs after a drastic fall and could be considered as a dead-cat bounce.
The pattern is already confirmed at the Rs 570 mark and, hence, traders are advised to create shorts in the range of Rs 570 - 575 levels for the downside target of Rs 535 with a stop loss of Rs 591.
HDFC Bank: Buy| LTP: Rs 2,270 | Target: Rs 2,375 |Stop Loss: Rs 2,225| Upside 4.6 percent
The recent correction from the top of Rs 2,497 got arrested exactly near the placement of the 200-Day Simple Moving Average.
From there, every time the stock turned below the average, we witnessed some buying interest, which helped it to come back above the level. This price action has now taken the shape of an inverse head-and-shoulder pattern (bullish).
In addition, the stock has turned from its long-term trend line positioned near Rs 2,150, which indicates a fresh upside. Traders are advised to buy the stock at 2,270 for the upside target of Rs 2,375 with a stop loss of Rs 2,225.
Castrol India: Buy| LTP: Rs.129 | Target: Rs 144 |Stop Loss: Rs.119 | Upside 13.39 percent
During the recent session, Castrol confirmed a price breakout on the daily chart above the Rs 128 mark on a closing basis.
The breakout was accompanied with a rise in volumes along with a fresh long build-up in the futures.
Further, the price action has taken the shape of bullish cup-and-handle and an inverse head-and-shoulder pattern, which indicates further upside.
Traders are advised to buy the stock in the range of Rs 129 and 125 for the upside target of Rs 144, and a stop loss of Rs 119.
The author is Sr. Technical & Derivative Analyst at IndiaNivesh Securities
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.
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