Shitij Gandhi SMC Global Securities
In recent weeks, the market undertone remain bullish with the Nifty testing record highs on the back of consistent short covering and long build-up. Metals, IT and pharmaceuticals are supporting the market trend. Sector rotation is likely to continue further in coming sessions as well.
Derivatives data indicates bullish scenario will continue with the Nifty having multiple strong supports at 11,700-11,680 spot.
We may see further short covering on expiry day as option writers were aggressive in 11,600 and 11,700 puts along with call unwinding in 11,600 calls.
On the technical front, 11,700-11,680 spot is a strong support zone for the Nifty with current trend likely to continue towards 11,800-11,820 levels in expiry week.
Here are 3 trading ideas that can return 10-13 percent in the near term:
AU Small Finance Bank: Buy | target: Rs 790 | Stop loss: Rs 665 | Upside: 11%
The stock has formed rounding bottom pattern on daily charts just below its 200-day exponential moving average and recovered sharply thereon to test Rs 720 levels this week. From last four weeks, we have observed consolidation in prices within range of Rs 675-720 along with consistent buying at lower levels. Moreover, this week the stock has given breakout above the ascending triangle pattern along with positive divergence on secondary indicators.
So, traders can accumulate the stock in range of Rs 710-720 for the target of Rs 790 with stop loss below Rs 665.
Sarda Energy & Minerals: Buy | Target: Rs 452 | Stop loss: Rs 385 | Upside: 10%
The stock has been trading under pressure since the beginning of 2018 and recently tested Rs 350 levels on downside to take support at its 100-day exponential moving average on weekly charts. This week, the stock has given breakout above its 200-day exponential moving average on daily charts along with breakout above its neckline of inverted head and shoulder pattern visible on daily interval.
The hefty volumes with rise in prices suggest that the breakout in prices can keep the momentum towards north in coming sessions.
So, traders can accumulate the stock in range of Rs 410-420 for the upside target of Rs 452 with stop loss below Rs 385.
Automotive Axles: Buy | Target: Rs 1580 | Stop loss: Rs 1280 | Upside: 13%
After taking support at its 100-day exponential moving average on weekly charts, the stock witnessed sharp recovery from lower levels and once again regains the momentum above its 200-day exponential moving average on daily interval. This week fresh breakout above the ascending triangle pattern has been witnessed along with hefty volumes and positive divergence on RSI and stochastic indicators.
So traders can accumulate the stock in range of Rs 1390-1415 for the upside target of Rs 1580 levels with stop loss below Rs 1280.
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