Dinesh Rohira
The Indian equity market fell for the fourth consecutive session in the backdrop of political uncertainty, deteriorating geopolitical climate and rising crude price. Further, lower-than-expected earnings for the March quarter weighed on equity markets.
The Nifty took a breather despite a positive opening in the early session and fell below its crucial support of 10,650-10,600 levels during the weekend session.
The index closed at 10,596 levels, down 1.94 percent on a weekly basis. With a negative breakout from its short-term moving average, the index has formed a long bearish candlestick pattern on its daily price chart indicating the possibility of further pressure on the index. It also witnessed a negative crossover on the moving average convergence divergence (MACD), with price trading below the Signal Line, thus indicating negative sentiment.
Rising crude oil prices will add to the inflationary pressure in the domestic economy, coupled with weakening of the rupee against the dollar and dramatic political scenario in Karnataka.
The overall market breadth is currently in the negative trajectory. The index breaching of its crucial levels in the last session indicates it will trade further at lower levels.
It is advisable to continue with selective sectors and stocks that are showing a positive momentum. We expect the Nifty to trade rangebound with a negative bias on a weekly basis at 10,670 levels on the upside and 10,510 levels on the downside.
Here is a list of top three stocks that could deliver up to 11% return in the short-term:
Time Technoplast Ltd: Buy | Target: Rs 145 | Stop-loss: Rs. 120 | Return 11%
Time Technoplast consolidated for almost a month after forming an upper band at Rs 180 levels and traded near the bottom band of Rs 118 levels.
However, scrip made a strong rebound in the last session to breakout from its 200-days EMA level placed at Rs 112, indicating a positive trend reversal. It also witnessed a strong volume growth above its average level to support uptrend.
Despite failing to hold at the day’s high level placed at Rs 134, the scrip formed an indicative bullish candlestick pattern on its daily price chart coupled with positive cues on MACD indicator moving towards upward crossover from Signal Line.
Further, the weekly RSI level inched higher from its earlier level which signaled a positive momentum. The support level for scrip is currently placed at Rs 118 and a strong resistance from 10-days EMA level is placed at Rs 158. We have a buy recommendation for Time Technoplast which is currently trading at Rs. 130.40
JK Tyre & Industries Ltd: Buy | Target: Rs 156 | Stop-loss: Rs 135 | Return 6%
JK Tyres made a sharp fall from its 52-week high which was registered a few months ago and continued to consolidate near Rs 143 levels which formed a strong support zone for the stock.
Last week it made an unusual breakout from its 100-days EMA level despite a weak market conviction, and a strong volume breakout indicating a positive trajectory.
On the daily price chart, the scrip made a solid bullish candlestick pattern coupled with reversal trend on its long-term chart. The RSI indicator at 44 levels also moved higher after trading near oversold zone indicating positive divergence coupled with the positive trend on its MACD.
The scrip is currently facing a resistance at 170 levels and support level at 129. We have a BUY recommendation for JK Tyres which is currently trading at Rs. 147.90
IRB Infrastructure Developers Ltd: Sell | Target: Rs 227 | Stop-loss: Rs 253 | Return 5%
IRB Infrastructure continued to consolidate on its weekly price chart despite attempting to breakout during its previous sessions from Rs 283 levels but failed to sustain the momentum.
Further, it witnessed a sustained selling pressure to breach below crucial EMA levels placed at Rs 249 levels coupled with weak volume trajectory, and thus indicating a negative sentiment for the scrip.
The scrip formed a strong bearish candlestick pattern on its weekly price chart suggesting a negative momentum in coming session.
Further, the secondary momentum indicator continued to indicate negative signal with RSI at 49 levels which is still above oversold zone coupled with weak support from MACD trend.
The scrip is facing a resistance at Rs 260 levels and support is placed at Rs 215 levels which will remain crucial for scrip. We have a SELL recommendation for IRB Infra which is currently trading at Rs. 238.50.
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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