We advise keeping a stock-specific trading approach with a focus on risk management aspects.
Markets further drifted lower amid volatility last week, tracking uncertain global markets and not so supportive local cues. The lingering trade war tension combined with geopolitical risk pressurized the world indices including India’s.
On the domestic front, a delay in the arrival of monsoon and the issue related to liquidity and corporate governance also weighed on the sentiment.
Markets settled marginally lower in a range-bound session on June 24 in absence of any fresh trigger. Mixed global cues led a flat start in the benchmark index, and it gradually drifted lower as the session progressed.
Participants are closely eyeing developments on the global front. However, signals are still indecisive, and that may cause further consolidation.
The Nifty50 has crucial support at 11,600, and its breakdown could trigger further fall. We advise keeping positions on both sides in such scenario and waiting for a decisive break for the next directional move.
In case of a rebound, 11,800-11,900 zone would act as a hurdle. We advise keeping a stock-specific trading approach with a focus on risk management aspects. Traders should prefer index majors over the others and maintain positions on both sides.
Here is a list of top three stocks which could give 4-6 percent return in the next one month:
LIC Housing Finance: Buy| Target: Rs 575| Stop-Loss: Rs 530| Upside 5.5 percent
LIC Housing Finance rebounded for the last eight months after a sharp correction from its record high. It retraced marginally of late and reached closer to the immediate support zone around Rs 525.
The chart pattern combined with the positioning of confirmation indicators is adding to the positivity. We advise accumulating the stock within the given range of Rs 540-545. It closed at Rs 546.05 on June 24.
Larsen & Toubro: Buy June Futures| Target: Rs 1,610| Stop-Loss: Rs 1,505| Upside 4.5 percent
L&T, after making a record high, has been consolidating in a range while holding firmly above the support zone of multiple moving averages on the daily chart.
It has witnessed a marginal pause, offering a fresh buying opportunity. We suggest traders to create fresh longs as per the mentioned levels of Rs 1,535-1,540. It closed at Rs 1,541.25 on June 24.
Tata Steel: Sell June Futures| Target: Rs 460| Stop-Loss: Rs 505| Downside 6.1 percent
Mostly metal counters are reeling under pressure, and Tata Steel is no different. After its failed attempt to surpass the resistance zone around Rs 500, it is again drifting lower.
Indications are in favour of further decline in the near future. We advise using any bounce to go short in the given range of Rs 490-494. It closed at Rs 486.25 on June 24.
(The author is President, Religare Broking Ltd)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.