Shabbir Kayyumi
With Nifty managing to close above psychological levels of 9,500, bulls are back in action. Nifty has formed a strong big body bullish candlestick pattern on a weekly timeframe indicating positive bias in progress. However, the highest high in the last four week is standing around 9,650 and weekly close above this mark will give a fresh breakout and prices can move towards previous swing high placed around 9,960 & further towards 10,220 which is mid-line of Bollinger Band.
Nevertheless, the recent formation of bullish Wolfe Wave pattern in Nifty had a target of 9,620 and a range trading probability of 9,700-9,300 in the coming days. Bollinger Band on the daily timeframe is squeezing, but a decisive price action may happen once Nifty crosses the resistance zone of 9,650-9,700.
Bank Nifty decisively surpassed major resistances in the last week and managed to close above 20 DMA indicating short term trend has reversed. However, previous swing high and crucial resistance is standing near 20,000 marks
Below are the top 3 stock ideas which can give good returns:
ONGC: Buy around Rs 80 | Target: Rs 91 | Stop loss: Rs 73 | Upside: 13%
The stock has seen a sharp sell-off from Rs 149 to Rs 50 levels. From the past few weeks, it has been consolidating in a wide range. Currently stock has given breakout with long body bullish candle from this consolidation indicating move on the upside.
Positive crossover of 20 and 50 DMA's are attributing further strength. RSI also gave a positive crossover with its average on the daily chart. Thus, stock can be bought around Rs 80 with a stoploss of Rs 73 and for the target of Rs 91.
HCL Technologies: Buy around Rs 525 | Target: Rs 590 | Stop loss: Rs 489 | Upside: 12%
The stock witnessed sustained sell-off over the past few weeks, however, the strong demand zone around Rs 480-500 zone which has emerged as the support for the same. On the weekly chart, the line of polarity suggests strong base and until this break decisively.
Formation of cup and handle on the daily chart indicates the consistency of positive rhythm in the stock. We expect the stock can perform going ahead and recommend buying in stock around Rs 525 with a stoploss of Rs 490 and for the target of Rs 590.
Maruti Suzuki India: Buy around Rs 5500 | Target: Rs 6200 | Stop loss: Rs 5090 | Upside 12%
Prices have given trend line breakout on the upside with the expansion of bands on daily chart suggesting a continuation of the trend in the direction of the breakout.
MACD has given bullish crossover and is about to move above the equilibrium level of zero on the daily chart. It has been in a steady uptrend in the last few days with higher trough and crests as well. Positive crossover of 20 and 50 DMA suggests firm support on dips.
Traders can accumulate the stock on dips around Rs 5,500 for the upside target of Rs 6,200 with a stop loss of Rs 5,090.
The author is Head of Technical Research at Narnolia Financial Advisors Ltd.
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