Dinesh Rohira
The Indian equity market traded volatile in the week gone by on trade war and rising crude oil price concerns, which kept the market breath weak.
The Nifty registered a positive performance on a weekly basis, closing marginal above last week’s close of 10,817. The index slipped below the 10,750 mark on Thursday but saw a swift rebound in Friday’s trading session. It ended Friday at 10,821 levels, a gain of only 0.04 percent week-on-week.
After recouping losses from Thursday's close, the index formed a bullish engulfing pattern on its daily price chart. No significant formation was made on the weekly charts, indicating a positive trajectory among market participants. On the weekly price chart, the relative strength index stood at 61, making a negative divergence marginally. The moving average convergence divergence (MACD) continued to trade with a bullish bias above its signal line.
This week, given the June F&O expiry and negative global triggers on trade tariffs, the index is likely to trade rangebound as it continues to face resistance at 10,895 levels on a weekly basis. With market breath continuing to favour a bearish regime, traders are advised to remain extremely selective on fresh position and adopt a sell on rally approach till the index surpasses 10,895 level decisively.
We maintain our view of a rangebound trade on a weekly basis with 10,890 levels on the upside and 10,740 levels on the downside:
Here is a list of top 3 stocks that could return 5-12 percent in the short term:
Adani Transmission Ltd: Buy| Target: Rs 183 | Stop-loss: Rs 152 | Return 12%
Adani Transmissions traded in a positive trajectory on its weekly price chart after making a sustain correction in the last six months in a range of Rs 235-120 levels.
It recently witnessed a strong momentum favoring the bullish trajectory as it managed to break out from the crucial moving average level of Rs 151-143, and made a gain of about 10 percent on weekly basis begged by volume buildup.
On the weekly price chart, the scrip registered a strong bullish candlestick pattern indicating a sustained rally after decisively closing above crucial levels.
Further, the weekly RSI at 50 levels which is above the previous level hints at a favorable divergence coupled with the positive signal on MACD trading above Signal-Line.
The scrip is currently holding resistance level at Rs 194 and support level at Rs 146. We have a buy recommendation for Adani Transmissions which is currently trading at Rs 164
Inox Wind Ltd: Buy| Target: Rs 98 | Stop-loss: Rs 85 | Return 7%
After making several corrections on the long-term chart in a price-band of Rs97-82 levels, Inox Wind witnessed a sharp turnaround at the lower channel to trade upward on weekly basis.
The scrip maintained a strong momentum throughout the week with about 7 percent gain on weekly basis and thus indicating a reversal trend.
Further, the scrip made a decisive breakout from the long-term moving average level of 100-days EMA supported by a decent volume momentum on the weekly basis.
The positive breakout on the weekly basis aided the scrip to form a solid bullish candlestick pattern indicating a strong reversal trend in the upcoming session.
The weekly RSI trend registered an upward momentum at 74 suggesting a positive divergence along with positive cues on MACD indicating fresh bullish crossover.
The scrip has a support placed at Rs 82 levels and resistance level at Rs 110. We have a Buy recommendation for Inox Wind which is currently trading at Rs 91.95
Apex Frozen Foods Ltd: Sell| Target: Rs 422 | Stop-loss: Rs 460| Return 5%
Apex Frozen Foods continued to consolidate on its long-term price chart and moved downward from its secondary high level during a week gone by.
During a weekend trade, scrip made a false breakout from its short-term hurdle but successively came under selling regime over a lack of positive trigger.
Further, it slipped from a crucial level placed at 100-days EMA at 458 levels coupled with negative volume growth indicating a sustained pressure on short-term basis.
The scrip formed a solid bearish candlestick pattern on its weekly price chart after breaching below long-term moving average level indicating a sustained pressure.
Further, the secondary momentum trend continued to indicate negative signal with RSI slipping below at 32 coupled with the bearish outlook from MACD trend.
The scrip is facing a resistance at Rs 490 levels and crucial support at Rs 419 levels. We have a sell recommendation for Apex Frozen which is currently trading at Rs 444.90
Disclaimer: The author is Founder & CEO, 5nance.com. 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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