Indices were all red last week as weak global cues, rising bond yields, and fears of COVID-19-led lockdown came to haunt the bulls on Dalal Street. The Nifty formed an opening body bearish Marubozu candlestick pattern and it filled the bullish gap standing around the 14,350-mark on March 19.
India VIX was down almost 10 percent and settled around 20 levels. Though falling volatility index with falling prices of the Nifty is creating doubt in the mind about the sustainability of the current bearish sentiment, the short-term bias will remain bearish till the index continues to trade below the crucial 20-day moving average (DMA) standing at around 14,900.
As momentum oscillators and indicators, specifically RSI & Stochastic, are trading in oversold zones, a relief rally towards 14,900 cannot be ruled out.
An early sign of trend reversal will come on a daily close above 14,900, till then, the Nifty will continue trading lower. Any decisive trading above 15,050 will conclude the current correction leg and the new up wave will start.
Bank Nifty
The Bank Nifty also gave a bearish price action the entire week and closed below its 50-DMA standing at around 34,200. As long as the banking index continues to form lower-high and lower-low formations, the possibility of touching the line of polarity placed around 32,800 is high.
Here is a list of three stocks that can return 13-20 percent in the short term:
Tata Motors: Buy around Rs 300 | Target: Rs 360 | Stop Loss: Rs 270 | Upside: 20 percent
The scrip spurted from a low of Rs 290 and formed a Hammer reversal candlestick pattern on the daily chart, indicating stability in the upcoming sessions. The emerging line of polarity on the daily time frame of the chart suggests bullish momentum in the scrip. Indicators and oscillators are also showing a conducive scenario for the coming sessions. One can go long in the scrip around Rs 300 for the target of Rs 350 and Rs 380 levels with a stop loss of Rs 270.
ITC: Buy around Rs 222 | Target: Rs 260 | Stop Loss: Rs 205 | Upside: 17 percent
This stock is trading above its crucial resistance of Rs 216 and is ready to move to higher levels. At the same time, it has given a break out of rectangle pattern and the stock can touch Rs 260 to achieve its targets. At the same time, prices have given trend line breakout on the upside with the expansion of bands on the daily chart suggests a continuation of the trend in the direction of the breakout. The stock has been in a steady uptrend with higher trough and crests as well. Traders can accumulate this stock for higher levels at around Rs 222 with stop loss of Rs 205 for a target of Rs 260.
Bharti Airtel: Buy around Rs 530 | Target: Rs 600 | Stop Loss: Rs 490 | Upside: 13 percent
The counter is bottoming out with a bullish reversal formation and above Rs 530 level, it is likely to rally towards Rs 600. The stock is trading above its 100 and 200-day moving averages where a previous breakout point of Rs 530 will act as strong support. Momentum indicators are positively poised on both daily and weekly charts, hence we recommend buying the stock around Rs 530 with a target of Rs 600 with a stop loss at Rs 490 on a closing basis.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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