By Dinesh Rohira
During a last week’s trade, the Nifty Index made a decent recovery for the two consecutive sessions to touch 10200 levels after slipping below a psychological level of 10000.
However, the selling pressure towards the last trading session dragged the index below its 200-days EMA level and ended the fiscal year on a weak note. The index consolidated about 0.69 percent to close at 10113 levels and lost about 4 percent on monthly basis.
The index formed a bearish candlestick pattern on its daily price chart after slipping below 200-day EMA levels placed at 10200, indicating a truncated momentum.
However, after trading near oversold zone the index formed a reversal trend on RSI which is at 40 coupled with a positive cue from MACD and Signal line although it is slightly weak at current trend.
The price continued to trade below all the levels based on Fibonacci retracement with major support for the index placed at 9951 levels and l resistance at 10417 levels.
The summoning of top bank executives, the RBI’s first bi-monthly meet for FY18-19 and the volatile global market regime is expected to be a crucial cue for the index to decide next lag of momentum.
A short-term rally is likely in upcoming session as Nifty signed an uptrend momentum during the initial trade of last week. However, a weak vindication at current phase can drag index on the profit-booking regime.
Therefore, we maintain a range bound trade at 10350 levels on upside and 9990 levels on the downside and advise to follow stock specific opportunities.
Here is a list of top three stock which could give up to 10% return in the short term:
JK Tyre & Industries Ltd: BUY | Target Rs 179 | Stop-loss Rs155 | Return 10%
After forming a strong support base at 143-134 levels, JK Tyre continued to trade on uptrend trajectory on weekly basis.
Despite a flat momentum in early trade, the scrip made a strong breakout from its crucial 50-days EMA level indicating a positive trend. It also witnessed a strong growth on volume front coupled with a breakout from an upper band based on Bollinger bandwidth, indicating an uptrend momentum.
On the weekly price chart, the scrip made a strong bullish candlestick pattern coupled with likely bullish crossover on MACD in the upcoming session.
Further, the RSI level at 58.8 up from earlier level signaled a positive cue with price trading above the resistance level. The scrip is currently holding support at 146 and resistance level is seen at 190. We have a BUY recommendation for JK Tyre which is currently trading at Rs. 162.95
Rallis India Ltd: BUY | Target Rs256 | Stop-loss Rs225 | Return 8%
Rallis India witnessed a robust momentum during last week’s trading session after forming a strong base at 215-213 levels on a short-term basis.
The scrip made a strong upward breakout from its 200&50-days EMA level indicating a reversal trend coupled with strong volume growth above its average level.
Further, Bollinger bandwidth suggests a positive breakout from its upper band placed at 220 levels which are likely to build the uptrend trajectory.
After closing on about 9 percent gain on weekly basis, the scrip made a bullish reversal candlestick pattern on its weekly price chart.
Further, the RSI at 59 above its resistance level has given a favourable buying regime coupled with positive cues on MACD. With price trading above crucial levels, the scrip is now facing a resistance at 264 levels and support level at 217. We have a BUY recommendation for Rallis India which is currently trading at Rs. 238.25
Prakash Industries Ltd: SELL | Target Rs159 | Stop-loss Rs175 | Return 6%
Prakash Industries continued to consolidate on its weekly and monthly price chart despite attempting to recoup its losses but failed to hold the level to slip below its crucial levels.
The scrip took a strong resistance at 168 levels on weekly trend channel which is likely to breach below on the backdrop of weak volume support. The scrip continued to lose about 4 percent on weekly basis and 20 percent on monthly basis.
The scrip continued to form a solid bearish candlestick pattern on its weekly price chart with price currently trading below all the levels. Further, the secondary momentum indicator continued to indicate negative signal with RSI at 36 levels coupled with weak support from MACD indicator.
The scrip is facing a resistance at 177 levels and strong support at 156 levels. We have a SELL recommendation for Prakash Industries which is currently trading at Rs. 169.10.
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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