Jayant Manglik
The Nifty settled with more than half a percentage gain amid volatility last week, although restricting itself to within the consolidation phase that we have been witnessing. However, recovery in the broader indices eased some pressure on market participants.
Technically, the index continues to hover within the 10,550-10,850 zone throughout last week. We believe that sustainability above 10,800 is essential for the Nifty to gain some momentum.
Going forward, consumer and wholesale inflation data for May, movement in crude oil prices, the US Fed meet and progress of the monsoon will dictate market trend.
Considering all the factors in play, we reiterate our advice to focus on stock selection and ensure that leveraged positions are hedged. Sectorally, though we are seeing participation gradually emerging across the board, FMCG, MNCs and the pharmaceutical space could be potential outperformers.
Here is a list of top three stocks that could return 6-9 percent in the short term:
ACC: Buy | Target: Rs 1,425 | Stop loss: Rs 1,270 | Return 8%
ACC has retraced considerably from its record high and reached closer to the major support zone placed around Rs 1,275. Indications are in the favor of consolidation followed by strong recovery ahead.
This corrective phase should be used to accumulate the stock in the range of Rs 1,310-1,320. It closed at Rs 1,320.20 on June 11, 2018.
Arvind: Buy| Target: Rs 430| Stop loss: Rs 395| Return 5%
Arvind has swiftly rebounded of late after re-testing its price support area placed around Rs 370 level. Further, on 11th June, it has formed a fresh buying pivot on the daily chart.
The existence of support zone of multiple moving averages has also added to the positive bias. We feel that the stock can be accumulated in the range of Rs 405-407. It closed at Rs 410.50 on June 11, 2018.
Tata Steel: Sell | Target: Rs 565 | Stop loss: Rs 613 |Return 4%
Tata Steel has been trading under pressure for the last three months having retraced considerably from the top. It has failed in the recent attempts to surpass the resistance zone of 50, 100, 200-day EMAs on the daily chart which resulted in the formation of a fresh shorting pivot.
The chart pattern and confirmation indicators are also pointing towards a fresh fall ahead.
Traders may use any bounce towards Rs 600-602 to create fresh shorts. It closed at Rs 589 on June 11, 2018.
Disclaimer: The author is President, Religare Broking Ltd. 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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