Dinesh Rohira
The Indian equity market ended the weekly session on a positive trajectory despite the trade war woes from the global market.
The dovish policy stance from the Reserve Bank of India (RBI) and a decent set of automobile volume coupled with an easing of banking pressure extended the Nifty the index to close with about 2 percent weekly gain at 10,331 levels.
Further, the index managed to close above its crucial support level placed at 10,300 indicating a positive short-term uptrend. The index formed a bullish candlestick pattern on its weekly price chart coupled with ‘doji’ kind of a pattern on daily chart after managing to close above 10,300 level, indicating positive sentiment for the bullish regime.
Further, the weekly relative strength index or the RSI at 52 moved higher from the earlier level, but it is slightly away from the buying regime. The stock is yet to test its immediate resistance level from its 50-day EMA level placed at 10,352.
The price continued to trade below all the levels based on Fibonacci retracement with support for the index placed at about 10,200 levels and resistance at around 10,417 levels.
With the start of earnings season and positive sentiment on the economy as indicated by RBI’s commentary coupled with buying regime from a foreign investor, the index is currently inclined towards bull regime on a short-term basis.
A breakout above 10,350 levels on closing basis will augur well for the index to trade on a positive channel near 10,450 levels. However, if new fears develop around global trade wars is likely to set the index towards the lower level.
A trader should cautiously maintain a stop-loss on all long positions. We maintain a rangebound trading on trade war woes at 10,450 levels on the upside and at 10,210 levels on the downside.
Here is a list of top three stocks which could give up to 10% return in the short term:
Gravita India Ltd: BUY| Target Rs192 | Stop-loss Rs165 | Return 10%
After a steep decline from levels of 187 to 145 in the past trading sessions, Gravita India made a decent rebound in last week’s trading despite the weak market breadth.
The scrip decisively broke out above its 50-days EMA level to form an uptrend channel on its weekly chart, and witnessed a strong volume growth to support uptrend.
Despite failing to hold Friday’s high level placed at 178, the scrip formed a strong bullish candlestick pattern on its weekly price chart coupled with bullish crossover just happening at MACD and Signal Line.
Further, weekly RSI level moved towards 61 level indicating a positive sentiment. The support level for scrip is currently placed at 162 and resistance level from the upper band at 197. We have a buy recommendation for Gravita India which is currently trading at Rs. 173.95
Nath Bio-Genes Ltd: BUY| Target Rs574 | Stop-loss Rs530 |Return 6%
Nath Bio-Genes witnessed a strong consolidation around 419-411 levels. Over a period of time, it made a strong rebound in last week’s session.
The stock bottomed out at 411 levels. On the daily price chart, the scrip made a solid bullish candlestick pattern coupled with reversal trend on its long-term chart.
The RSI at 67 indicates a price which is just trading above its resistance level and showing a good signal to enter. The scrip is currently facing a resistance at 583 levels and the support level is placed at Rs498. We have a BUY recommendation for Nath Bio-Genes which is currently trading at Rs. 542.30
Adani Transmission Ltd: SELL | Target Rs170 | Stop Loss Rs184 |Return 5%
Adani Transmission continued to consolidate on its weekly price chart after making a short-term breakout in the previous session, but it failed to sustain the momentum.
The scrip witnessed a sustained selling pressure to breach below its crucial EMA levels placed at 191 levels coupled with weak volume trajectory, indicating a negative sentiment for the scrip.
The scrip formed a strong bearish candlestick pattern on its weekly price chart suggesting a negative momentum in coming session.
Further, the secondary momentum indicator continued to indicate negative signal with RSI at 37 levels which is still above oversold zone coupled with weak support from MACD trend.
The scrip is facing a resistance at 191 levels and support at 160 levels which will remain crucial for scrip. We have a SELL recommendation for Adani Transmission which is currently trading at Rs. 178.85.
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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