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Last Updated : Jul 30, 2018 08:15 AM IST | Source: Moneycontrol.com

See Nifty at 11,450 levels; 5 largecaps, 1 midcap that could return up to 20%

Shabbir Kayyumi of Narnolia Financial Advisors expects sideways to bullish movement for the Nifty in coming sessions, within a range of 11,450 on the higher side and 11,100 on the lower side

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Shabbir Kayyumi

Narnolia Financial Advisors

Indices are soaring higher into uncharted territory without any interruption. Momentum is seen in state-run banks, whereas Nifty Metal and Midcap indices bounced back from their lows.

The suggested Double Top Buy pattern on the Point & Figure chart has got achieved. The Nifty's 5-day simple moving average (DMA) stands around 11,159, which indicates that the bull run is intact unless the index trades below it. The benchmark index has a higher gap unfilled around 11,185 levels. So, the possibility of prices retracing to fill the gap cannot be ruled out.

The Nifty has also given a classical flag pattern breakout. The target as per the pattern is 11,400, which is supportive for the bulls. It previous high of around 11,171 levels can act as support too.

Looking at the options data, the highest put open interest is seen around 11,000 strike, followed by 11,200 strike. Maximum call OI is seen around 11,500 levels, followed by 11,400. The data signifies an immediate trading range between 11500 and 11,100 levels.

We expect sideways to bullish movement in coming sessions, within a range of 11,450 on the higher side and 11,100 on the lower side. Stock specific action can also be seen. If the Nifty closes below 11,120 levels, it can correct to 10,930/10,880 levels.

The Bank Nifty is trading higher after a breakout from the tight range of 27,200 and 26,650. We expect sideways to bullish movement in a 27,700-27,300 range. The psychological mark of 28,000 can act as a resistance, while support lies around 27,350 levels.

Here is the list of five stocks that could return up to 20 percent in the short term:

Hindustan Zinc | Buy Range: Rs 267-270 | Target: Rs 320| Stop Loss: Rs 255 | Upside: 20%

After giving a decent fall, scrip seems to be bottoming out near its channel support line. Consistent formation of Bull candle near its support line giving a hope to Bulls for making long position in the scrip.

Formation of inverted H&S where right shoulder is in progress which is price reversal pattern indicates up move in coming sessions. The weekly chart is showing parity with its historical levels.

Oversold stochastic is also lending support its price action. One can go long around Rs 267-270 levels with the stop loss (SL) of Rs 255 for the target of Rs 320.

Federal Bank | Buy Range: Rs 87-89 | Target: Rs 105 | Stop Loss: Rs 77 | Upside: 20%

Daily chart of stock reveals that demand is increasing and supply is diminishing. Rising trend line from lower levels is displaying trend reversal and creates a buying opportunity at the current juncture.

Breakout of Inverted H&S on chart augur well for the Bulls and indicate surge on the upside.

Apart from this, the sustainability of MACD Histogram along with positive territory signals optimism, suggest upside move in the counter in the coming sessions. We suggest buying Federal bank around Rs 87-89 with SL of Rs 77 target Rs 105.

Tata Motors | Buy Range: Rs 267 | Target: Rs 320 | Stop Loss: Rs 248 | Upside: 20%

Strong support around Rs 260 levels suggests buying opportunity. Moreover, Bullish engulfing formation on weekly chart where current candle completely engulfs the previous candle is Bullish reversal pattern in nature and signals bullish tone in coming sessions.

While looking in a shorter time frame of the chart, it has formed Cup and Handle pattern which is also showing strength in the counter.

Indicator and oscillator are lending support to price action. One can take a long position at current level with the SL of Rs 248 for the target Rs 310 and Rs 330.

Karnataka Bank | Buy Range: Rs 113-115 | Target: Rs 133 | Stop Loss: Rs 103 | Upside: 18%

On a daily chart, the stock has formed Double bottom which is a bullish reversal formation indicates positive rhythm. Moreover, the stock has formed a Bullish Engulfing pattern which is also a Bullish reversal candlesticks pattern.

Trendline breakout is expected above 120 from where the momentum of upside can be seen in the counter. Furthermore, Momentum indicator RSI reading comes at 40 with a positive crossover which is a signal of optimism.

Based on the mentioned technical structure, we are expecting upside movement in the counter in coming sessions. We advise buying KTK bank around Rs 113-115 with SL of Rs 103 for the target of Rs 133.

DLF | Buy Range: Rs 183-185 | Target: Rs 215 | Stop Loss: Rs 168 | Upside: 17%

Price of DLF has seen a sharp rebound after hitting a low of Rs 168 where its key support is seen. The emergence of Tweezers bottom on the weekly chart is giving the possibility of a pullback on the higher side in coming sessions.

Moreover, Prices are forming Falling wedge pattern on the longer time frame of chart and resolute trend line breakout is expected to come above 192 from where it will increase its velocity.

RSI also gave trend line breakout after bottoming out near oversold zone and weekly MACD in uptrend along with declining histogram in negative territory thus supports bullish bias in the stock. We recommend buying DLF around Rs 184-185 with the stop loss of Rs 168 for the target of Rs 215.

Disclaimer: The author is Head - Technical & Derivative Research at Narnolia Financial Advisors. The views and investment tips expressed by investment experts on moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
First Published on Jul 30, 2018 08:15 am
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