The current weakness is likely to get extended further only if the weekly Doji pattern low of 11,559 is broken on a closing basis, which is acting as crucial support.
Nifty50 continued to grind in a narrow trading band. The Double Top formation and Doji candlestick pattern formation on the weekly chart continue to act as pain points.
The current weakness is likely to get extended further only if the weekly Doji pattern low of 11,559 is broken on a closing basis, which is acting as crucial support. While on the upside, 11,700 is important resistance to watch out for.
On the other hand, Bank Nifty is leading the decline as the index has cracked below crucial support of 30,000 psychological levels.
Going forward, the 29,300 zone is important to support. Also, the sudden spike in VIX indicates limited upside with a volatile swing in the market.
The advance-decline ratio also continues to remain in favour of the bears. It would be prudent to remain stock specific.
Here is a list of top three stocks which could give 5-8% returns in 1 month:
Bajaj Finserv: Buy| Target: Rs 7,940| Stop Loss: Rs 7,370| Returns 5%
The stock has shown immense strength and has rallied significantly. It has once again broken out from a Flag pattern on the daily chart.
The price outburst has been accompanied by a smart uptick in traded volumes. Investors can hold long positions in the stock with a target of Rs 7940 and a stop loss of Rs 7370 on a closing basis.
BHEL: Buy| Target: Rs 80| Stop Loss: Rs 71| Returns 8%
The stock has been in a declining mode in the past week and has finally broken out from a falling channel pattern on the daily chart.
The stock has found support at its long term 200-DEMA and has bounced back with a smart uptick in volume. We expect the stock to make a move towards its near-term target of Rs 80.
Maruti Suzuki India: Buy| Target: Rs 7650| Stop Loss: Rs 7030| Returns 6.5%
The stock has broken out from a classic Cup and Handle formation. The price has now breached past the neckline of Rs 7150 and is also sustaining above the same.
Maruti is also holding above its 100-DEMA for the past three trading sessions. Investors can hold long positions in the stock with a mentioned stop loss on a closing basis.
(The author is a Senior Technical Analyst, IIFL)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.