The grind continues as the benchmark indices remain stuck within a 300-points trading range for the fifth consecutive week.
Nifty is currently trading very close to the higher end of the trading range and the resistance is around the 11,860 levels.
Only a break above the resistance will lead to a fresh up move. On the downside, 11,550 is important support area for Nifty.
Bank Nifty, too, is seen swinging in a structured manner for the past five weeks. Going forward, 29,400 is crucial support zone while the immediate resistance is seen around the 30,300 zone.
Apart from this, May in an election year has proved to be highly volatile. In addition, India Vix has also shot up to ~23 levels which indicates wild gyrations is in the offing in the build-up to the election verdict on May 23.
It would be advisable to remain light on positions and stock-specific.
Here are three stock picks that could give 5-8% return in the next 1 month:
HDFC: Buy| Target: Rs 2,118| Stop Loss: Rs 1,967| Upside 5%
The stock has recovered smartly during the week and has also held above its previous week’s low convincingly. HDFC also found support around its 21-DEMA levels as well.
A falling channel pattern breakout accompanied with volumes indicates the stock has the potential to extend the current momentum. Hold long positions with the mentioned stop loss on closing basis.
SBI Life: Buy| Target: Rs 690| Stop Loss: Rs 630| Upside 6%
The stock has broken out from a classic cup and handles pattern on the weekly chart. The price outburst has been accompanied by a smart uptick in traded volumes.
SBI Life has also managed to surpass and also close above its long term 200-DEMA. We expect the stock to make a move towards its potential target of Rs 690 in the medium term.
Bandhan Bank: Buy| Target: Rs 675| Stop Loss: Rs 600| Upside 8%
The stock has been consolidating for the past four trading sessions and has broken out from a Flag pattern on the daily chart. The breakout has been accompanied with a smart uptick in traded volumes.
The RSI holding above 70 mark indicates that the current momentum is here to stay. Hold long positions with the mentioned stop loss on closing basis.
(The author is a Senior Technical Analyst, IIFL)
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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