The daily chart analysis indicates that the Nifty has formed a ‘Hammer’ kind of a candlestick pattern and a close above the 11400 mark would confirm that a short-term recovery is on the cards.
The market extended its losing streak for seventh consecutive session led by index heavyweight Reliance Industries. Nifty broke below the 50-DEMA but managed to find support at the 100-DEMA, which is around 11,250.
Daily chart analysis indicates that Nifty has formed a ‘Hammer’ kind of a candlestick pattern and a close above the 11,400-mark would confirm that a short-term recovery is on cards.
The Bank Nifty formed a Doji kind of a candlestick pattern indicating a recovery in the index. The near-term resistance is now seen around the 50-DEMA of 29,300 zone.
The metals index has also been weak for some time now and is also on the verge of negating inverse head and shoulder pattern which could further dent the metals stocks. It would be prudent to remain cautious about the metal space in the near term.
Here are three stocks that could give 4-7% return in the next 1 month:
Britannia Industries: Buy| Target: Rs 2,870| Stop Loss: Rs 2,610| Upside 7.5%
The stock has been under pressure for the past five weeks and has finally found support around the October 2018 lows of Rs 2615. It has also formed a Hammer pattern followed by a solid bullish candle on the daily chart.
We expect a recovery in Britannia given the above evidence. Investors can hold on to long positions in Britannia Industries with a mentioned stop loss on closing basis.
Divi’s Laboratories: Sell May Futures| Target: Rs 1,553| Stop Loss: Rs 1,662.5| Downside 5%
The stock has been under pressure for the past week and has broken down from rising channel pattern on the daily chart.
Divi’s has also slipped below its 50-DEMA and also closed below the same. We expect weakness to persist in the stock in the near term. Investors can hold on to short positions with a mentioned stop loss on a closing basis.
Hindustan Unilever: Buy| Target: Rs 1,775| Stop Loss: Rs 1,670| Upside 4.5%
The stock has been consolidating for the past four trading sessions and is hovering above its long term 200-DEMA. The stock has also found respite around its April 2019 lows indicating short term support is in place.
We expect a recovery in Britannia given the above evidence. Investors can hold on to long positions 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.