Ashish Chaturmohta
The Nifty saw a sluggish action with sideways to negative movement until last hour of the trade on February 5. Key heavyweight stocks helped the index to move into the green on a stock specific day, closing at 10,912.
The broader market, BSE Midcap and Smallcap underperformed the benchmark losing 0.86 percent and 1.17 percent, respectively. The market breadth on the NSE was negative with one stock advancing for every three declines.
For the day, the index formed a bullish candlestick. But, Nifty has largely been range-bound between 11,000 and 10,550 for the last couple of months. It has made multiple attempts at 11,000 to move above it but has failed each time.
Hence, 11,000 needs to be crossed on a sustainable basis for the market to move higher towards 11,090 and 11,170. On the downside, the immediate support is placed at 10,813, which is two-session low. A move below 10,813 can take the index to retest 10,630-10,585.
Nifty options: Maximum open interest for Puts is seen at strike price 10,700 followed by 10,740. For Calls, it is seen at 11,000 strike price followed by 11,100.
Put writing was seen in 10,800 and 10,900 suggesting support is shifting higher; whereas Call writing was seen at 11,100. India VIX closed flat for the day at 15.72, but it declined 11.14 percent last week.
VIX needs to move below 15 for markets to see a sustainable breakout on the upside, otherwise, the index is likely to continue in range or head lower.
Here is a list of top 5 stocks that could give 7-11 percent return in 1 month:
Jubilant Foodworks: Buy| LTP: Rs 1,397| Stop loss: Rs 1,325| Target: Rs 1,560| Upside: 11 percent
The stock has been consolidating in a small range starting from Rs 1,376 on the downside and Rs 1,146 on the upside for the last couple of months. In the last three sessions, the stock has rallied on a strong momentum with a long bullish candle and high volumes at lower levels indicating buying participation.
The stock was facing resistance at Rs 1,348 that is 61.8 percent Fibonacci retracement level of the fall from Rs 1,578 to Rs 977. The price has seen a decisive breakout and closed above it.
MACD line on the weekly chart has moved above equilibrium level indicating a change in the trend. Thus, the stock can be bought at current levels and on dips towards Rs 1,375 with a stop loss below Rs 1,325 and a target of Rs 1,560.
Tata Consultancy Services: Buy| LTP: Rs 2,050| Stop loss: Rs 1,950| Target: Rs 2,250| Upside: 10 percent
The stock witnessed a decline from its all-time high of Rs 2,276 to low of Rs 1,784 in October last year. Since then, the stock has been consolidating in the range of Rs 2,030 and Rs 1,784 and formed a strong base.
It has bounced back from Rs 1,808 and Rs 1,784 multiple times indicating strong support level for the stock. On January 4, the stock has given a breakout from its consolidation zone after a strong rally from the lower end of the range.
It has also cleared a falling area of October last year that was acting like a big resistance for the stock. MACD line has given positive crossover with its average and moving up from the equilibrium level of zero on the weekly chart.
Thus, the stock can be bought at current levels and on dips towards Rs 2,020 with a stop loss below Rs 1,950 and a target of Rs 2,250.
Reliance Industries: Buy| LTP: Rs 1,291| Stop loss: Rs 1,240| Target: Rs 1,400| Upside: 8 percent
The stock had witnessed a consolidation between Rs 1,186 and Rs 1,016 for almost three months. In January, the price broke from the range with high volumes and strong momentum indicating buying participation in the stock.
It touched high of Rs 1,265 and then witnessed a throwback i.e. corrected on below-average volumes to test breakout level. Now, the stock has rallied to hit a new swing high on momentum and volumes.
Thus, the stock can be bought at current levels and on dips towards Rs 745 with a stop loss below Rs 715 and a target of Rs 1,400.
Housing Development Finance Corporation (HDFC): Buy| LTP: Rs 1,979| Stop loss: Rs 1,900| Target: Rs 2,150| Upside: 8 percent
The stock witnessed a strong rally from low of Rs 1,645 in October to high of Rs 2,017 in December last year. Since then it has been consolidating between Rs 2,017 and Rs 1,855 for the last couple of months.
It has been trading above its 200-day moving average and took support at the average to rally in the last three days. The relative strength index (RSI) has given a positive crossover with average on the daily chart.
Thus, the stock can be bought at current levels and on dips towards Rs 1,950 with a stop loss below Rs 1,900 and a target of Rs 2,150.
Page Industries: Buy| LTP: Rs 24,201| Stop loss: Rs 23,300| Target: Rs 26,000| Upside: 7 percent
The stock has been in a decline mode for the last five months from the high of Rs 36,335 to a low of Rs 21,601. It has formed higher low on the daily chart and is showing signs of a reversal.
The stock crossed above the falling resistance trendline connecting highs of Rs 36,335 and Rs 30,500. The Relative Strength Index has moved above its average on weekly chart after five months indicating a change in long-term trend.
The price has given a breakout on the upside from Bollinger Band with the expansion of bands indicating a continuation of the trend in the direction of breakout on the daily chart.
Thus, the stock can be bought at current levels and on dips towards Rs 23,850 with a stop loss below Rs 23,300 and a target of Rs 26,000.
The author is Head of Technical and Derivatives at Sanctum Wealth Management.
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.
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