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Last Updated : Jul 27, 2020 10:25 AM IST | Source: Moneycontrol.com

Profit booking likely going ahead; 10 trading ideas that could give 8-23% return

Technicals suggests that the market is trading in an overbought zone, but there are no eminent signals which suggest that traders should go short

 
 
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India market rallied for the sixth consecutive session in a week. The S&P BSE Sensex rallied by about 3 percent while the Nifty50 gained 2.6 percent for the week ended July 24.

The Nifty breached crucial resistance levels in the week gone by but given the fact that the index is trading near crucial resistance levels; hence, some bit of profit booking cannot be ruled out.

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“Good monsoon and expectations of rural markets being steady against urban, will remain the theme for the time being and provide comfort,” Paras Bothra, President of Equity Research, Ashika Stock Broking told Moneycontrol.

“Besides, the earnings season has picked up and few companies have beaten consensus estimates and thus stock-specific activity will be seen and profit booking will be an obvious outcome,” he said.

Technicals suggests that the market is trading in an overbought zone, but there are no eminent signals which suggest that traders should go short, but long positions could be reduced, suggest experts.

“Since we are extremely overbought, we are in two minds whether to go with the theoretical characteristic of this term ‘overbought’ or the practical one. Because, theoretically, the current placement of the market is just ideal to see some genuine correction; but practically as we all know, the market has the tendency to surprise us all the time,” Sameet Chavan, Chief Technical & Derivatives Analyst at Angel Broking told Moneycontrol.

“Hence, rather anticipating things from here on, we would rather let the market give us a further indication. As we step into the monthly expiry week, our eyes would be on a few crucial levels. On the upside, 11250 is the level to watch out for; whereas, 11050 has now become key support,” he said.

Chavan is of the view that as an optimist, one should remain hopeful as long as we are trading above this swing low (11050) and expect the market to give breakout in an upward direction to extend the move towards 11350 – 11400. However, a breach of the lower end should be treated as a short-term pause to see some decent profit booking.

We have collated a list of top 10 stocks from various experts which could give 8-23% return in the next 3-4 weeks:

Expert: Shabbir Kayyumi, Head of Technical Research at Narnolia Financial Advisors Ltd.

Ashok Leyland Ltd: LTP: Rs 50.40| Buy| Buy around Rs 50| Target: Rs 62| Stop Loss: Rs 43| Upside 23%

On the daily chart, the stock has taken the support of its lower band of falling channel line formation in which the stock has been trading since the last many days which indicates a breakout movement in the counter.

Moreover, bullish crossover in MACD also suggests a positive trend for the time being. Based on the above technical structure, one can take a long position in the stock around 50 with a stop loss of 43 for the target of 62.

Canara Bank: LTP: Rs 101.30| Buy around: Rs 101|Target: Rs 121| Stop Loss: Rs 89| Upside 20%

The stock has closed near its long term support zone and has experienced bounce back many times from the current levels.

RSI has also turned positive on the weekly chart which suggests a limited downside in the stock and it can show pullback on the upside. The formation of dragonfly Doji near key support is indicating the possibility of a pullback.

This could bring the stock to test the long term moving averages as the potential target in the coming session. Traders can buy Canara Bank around 101 with a stop loss of 89, and a target can be placed at 121.

IndusInd Bank Ltd: LTP: Rs 522| Buy around: Rs 520|Target: Rs 580| Stop Loss: Rs 488 | Upside 11%

The scrip spurted from a low of 330 after forming Bullish Engulfing candlestick pattern, it showed pullback on upside marked the high of 536 marks and started consolidating in the shorter time frame of the chart.

Currently, it is waiting for the breakout on the upside so that it can accelerate buying momentum further. The emerging line of polarity on the daily time frame of the chart is suggesting bullish momentum in the scrip.

Indicators and oscillators are also showing a conducive scenario in the coming sessions. So based on the mentioned technical structure one can go long in the scrip around 520 for the target of 580 marks, and a stop loss can be placed below 488.

Expert: Gaurav Garg, Head of Research at CapitalVia Global Research Limited- Investment Advisor

Aarti Industries: LTP: Rs 950| Buy above Rs 960| Target: Rs 1050| Stop Loss: Rs 890| Upside 10%

After consolidating in a narrow range, the stock is ready to witness bounce back after consolidating. On the daily chart, the stock is in a bullish trend. The RSI is at 58 which is indicating there might be still a chance for a bullish trend.

We recommend buying the stock above Rs 960 for the target of Rs 1050, keeping a stop loss at Rs 890 on a closing basis.

MCX: LTP: Rs 1501| Buy above 1535| Target: Rs 1650| Stop Loss: Rs 1440| Upside 10%

The stock is trading at a near resistance level of 1530 any breakout above this level might lead to a bullish trend in the near future. A breakout from Rs.1530 would lead to the stock witnessing more upward movement.

We recommend buying the stock above Rs. 1535 for the target of Rs 1650, keeping a stop loss at Rs 1440 on a closing basis.

Jubilant Lifesceiences: LTP: Rs 752| Buy above 760| Target: Rs 880| Stop Loss: Rs 670| Upside 17%

The stock is sustaining on major moving averages on daily charts and on the weekly chart the stock in the bullish trend. Along with this, the stock is also witnessing moving average crossover which will further strengthen the bullish movement. Considering the technical evidence discussed above.

We recommend buying the stock above Rs 760 for the target of Rs 880, keeping a stop loss at Rs 670 on a closing basis.

IPCA Laboratories: LTP: Rs 1781| Buy above 1845| Target: Rs 2000| Stop Loss: Rs 1780| Upside 12%

The stock had recently witnessed its all-time high at Rs.1844 and had been in the bullish trend. And, any breakout above the level of Rs.1844 might lead to a new high. Further, the stock has taken support at its key moving average.

We recommend buying the stock above Rs 1845 for the target of Rs 2000, and keep a stop loss at Rs 1780 on a closing basis.

Expert: Sameet Chavan, Chief Technical & Derivatives Analyst at Angel Broking

Natco Pharma | Buy | LTP: Rs 730 | Target price: 800 | Stop loss: Rs 668 | Upside: 10%

The entire pharma space has been in limelight since the coronavirus pandemic outbreak.

One after another, almost every stock in this space or related, has seen a spectacular rally.

Natco Pharma has finally joined hands with its other peers and has been witnessing good buying interest for the last month.

In this process, we witnessed a series of higher highs higher lows and multiple breakouts.

Last Thursday, the stock prices broke out from a bullish flag pattern. The notable observation is the volume at which this breakout happened.

We could see more than thrice of average daily volumes to confirm a colossal intraday rally.

IRB Infrastructure Developers | Buy | LTP: Rs 122.15 | Target price: Rs 132 | Stop loss: 120.20 | Upside: 8%

This is one of the laggards since May 2018 which has shown some spectacular moves over the last couple of months.

This month to date, the stock has added whopping 44 percent gains to the bulls’ kitty. Now, after taking a brief pause, we can see a breakout on the daily chart.

This price action collectively can be known as a bullish flag breakout. Looking at the higher degree timeframe charts, we expect the next leg of the rally to unfold in the coming days.

Expert: Manish Srivastava, Sr.Technical Analyst (equity & currency) at Rudra Shares & Stock Brokers Ltd.

VIP Industries: LTP: Rs 287| Buy| Target: Rs 325| Stop Loss: Rs 262|Upside 13%

Convergence and overlapping of moving averages on the daily chart have eventually taken the shape of a bullish setup.

Bullish crossover of short term and medium term moving averages and triangle breakout with decent volume indicates that the stock is getting ready for a big up move in the coming days.

The breakout has followed by a minor dip and being available at retracement, the stock is providing a decent risk-reward opportunity.

Buying positions can be initiated at the current market price (CMP) and on any dip till 275. The positions can be held with a short term perspective.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

First Published on Jul 27, 2020 10:22 am
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