The immediate support for Nifty is placed at 10,740 below which further selloff can be seen which could drag the Nifty50 towards 10,600 levels.
Indian markets came under heavy selling pressure in the session on September 17 on the back of a surge in crude oil prices along with depreciating rupee as geopolitical tensions spooked investor sentiments.
The Nifty50 indices slipped well below 10,850 mark as call writers seen active in 10,900, and 11,000 strikes. Alongside, Bank Nifty also added short positions which pointed towards more downside into prices in the coming sessions.
From the technical front, the immediate support for Nifty (SPOT) is placed at 10,740 below which further selloff can be seen which could drag the Nifty50 towards 10,600 levels.
However, on the higher side, 10,900 is likely to act as a strong hurdle for the Nifty50. As far as Bank Nifty is concerned, 26,800 (SPOT) will act as immediate support for the index and we believe that the market is likely to remain under pressure for the coming week as well.
Here is a list of top three stocks which could give 6-9 percent return in the next three-four weeks:
Finolex Industries: Buy| Target: Rs 580| Stop Loss: Rs 500| Upside 9 percent
The stock has been consolidating in a broader range of Rs 500-530 for the last two months along with consistent buying seen at lower levels.
This week, the stock witnessed a breakout above the key resistance level of Rs 530 after prolonged consolidation along with higher volumes which suggest more upside into prices.
Traders can accumulate the stock in the range of Rs 530-535 for the upside target of Rs 580 levels and a stop loss below Rs 500.
Axis Bank: Sell| Target: Rs 604| Stop Loss: Rs 670| Downside 7 percent
The stock has been consistently maintaining its bearish trend and after witnessing a steep fall in the recent past from Rs 750 levels.
The stock went into a consolidation phase and has been trading in a broader range of Rs 690-650 from the past five weeks.
This consolidation has formed a rectangle pattern on daily charts and this week we have observed a fresh breakdown into the prices below the key support of Rs 650 and also below the mentioned pattern.
The rectangles are generally traded as a continuation pattern of the previous trend. Traders can take a short position in the range of Rs 640-650 for the downside target of Rs 604 levels with a stop loss above Rs 670.
Infosys: Buy| Target: Rs 870| Stop Loss: Rs 785| Upside 6 percent
After consolidating in a broader range of Rs 760-800 levels, the stock managed to give a fresh breakout above the key resistance level of Rs 800 and tested Rs 847 levels in a short span of time.
The breakout has happened with marginally higher volumes. At the current juncture, the stock is consistently trading above the breakout level of Rs 800 which should now act as strong support level.
On the daily as well as weekly interval, the stock is trading in a rising channel pattern forming higher highs and higher bottom pattern.
Traders can accumulate the stock in the range of Rs 820-830 levels for the upside target of Rs 870 levels, and a stop loss below Rs 785.
(The author is a Senior Research Analyst, SMC Global Securities Ltd)Disclaimer: The views and investment tips expressed by investment experts 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.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.