After a gap-up opening, the market failed to hold on to its gains and sold off in the last hour of trade. Nifty ended the day at 11,498 down 0.87 percent.
The broader market indices such as the BSE Midcap and Smallcap were down 0.98 percent and 0.85 percent, respectively.
For the last five weeks, the index has been trading in a range of 11,550-11,850. It broke this consolidation zone and closed below it with a bearish long body candlestick on the daily chart on May 7. We expect selling pressure to continue initially towards 11,370-11,350 and then 11,200 where next supports are seen.
On the upside, 11,550-11,650 will act as resistance zone for the index. In Nifty weekly options, a significant amount of Call writing was seen in 11,500 to 11,650 strike price, while Put unwinding was seen 11,600.
Thus, in the near-term, Nifty is likely to see an overhead resistance at 11,550-11,650. India VIX closed marginally higher by 0.19 percent for the day at 26.48 which is almost at three years high.
Going forward, we expect VIX to remain at elevated levels as markets head towards election results.
Here are five stocks that could give 10-14 percent return in the next one month:
Shree Cements: Buy| CMP: Rs 19,766| Stop loss: Rs 19,100| Target: Rs 21,750| Upside: 10 percent
The stock hit an all-time high of Rs 20,538 couple of year ago and went into correction mode since then. It touched a low of Rs 13,100 in October last year and then rallied back to current levels.
The price crossed above the falling resistance trend line connecting correction highs of Rs 20,538 and Rs 19,849 thus, indicating the correction is over and the stock has resumed its uptrend.
The stock has been forming higher highs and higher lows on the daily chart. The stock price has been moving along 21-day exponential moving average which has been acting as a support for the stock on dips.
Thus, the stock can be bought at current levels and on dips towards 19,600 with a stop loss below Rs 19,100 and a target of Rs 21,750.
DCB Bank: Buy| CMP: Rs 214| Stop loss: Rs 204| Target: Rs 245| Upside: 14 percent
After hitting a high of Rs 213 in June’17, the stock has entered into a correction phase and touched a low of Rs 140 in October last year.
Since then, the stock has seen a strong rally forming higher tops and higher bottoms on the weekly charts. In early March this year, the stock witnessed a breakout from falling trend line connecting correction highs of Rs 213 and Rs 204.
It went on to hit an all-time high of Rs 220 with strong momentum and high volumes indicating buying participation in the stock.
The stock is now consolidating near its high point in a narrow range and below average volumes for the last few sessions forming bullish pole and flag pattern.
Thus, stock can be bought at current levels and on dips towards Rs 211, and a stop loss below Rs 204 with a target of Rs 245.
Petronet LNG: Buy| LTP: Rs 238| Stop loss: Rs 228| Target: Rs 275| Upside: 15 percent
After touching an all-time high of Rs 275 in November’17, the stock corrected down towards Rs 202 in May’18. It has formed multiple lows around Rs 202 and has seen a rangebound action between Rs 202-232 indicating as a value area for the stock.
Looking at the broader time frame charts, the stock has been consolidating between Rs 202 to Rs 250 for the last one year.
In April, the stock witnessed a breakout to touch a high of Rs 255 and is now seeing a short-term consolidation below the breakout level.
It is seeing some buying around Rs 232 which was the previous consolidation high. The relative strength index and stochastics have given a positive crossover with their respective averages on the daily chart.
Thus, the stock can be bought at current levels and on dips towards Rs 235 with a stop loss below Rs 228 and a target of Rs 275.
Max Financial Services: Sell| CMP: Rs 408| Stop loss: Rs 428| Target: Rs 360| Downside: 11 percent
The stock is in a downtrend forming lower tops and lower bottoms on the weekly chart. In the last few months, the stock has seen a bounceback from lower levels of Rs 350-360 but has failed to cross the Rs 465-450.
The stock has shown a reversal and closed below the previous swing low of Rs 411. The price has again moved below its 200-day moving average.
Also, the price has given a breakout on the downside from the Bollinger Band with the expansion of bands indicating a continuation of the trend in the direction of breakout on the daily chart.
MACD line has given a negative crossover with its average and moved below equilibrium on the daily chart. Thus, stock can be sold at current levels and on the rise to Rs 413 with a stop loss above Rs 428 and a target of Rs 360.
Amara Raja Batteries: Sell| CMP: Rs 643| Stop loss: Rs 665| Target: Rs 580| Downside: 10 percent
The stock has seen a consolidation between Rs 900 and Rs 660 for the last 18 months. It has broken this consolidation range and is now trading below it.
The price has given a breakout on the downside from the Bollinger Band with the expansion of bands indicating a continuation of the trend in the direction of breakout on daily as well as on weekly chart.
MACD line has given a negative crossover with its average below equilibrium on the daily chart. Thus, stock can be sold at current levels and on a rise towards Rs 650 with a stop loss above Rs 665 and a target of Rs 580.
The author is Head of Technical and Derivatives, Sanctum Wealth Management.
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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