Mazhar Mohammad of Chartviewindia.in said in case of a fresh breakout above 11,500 levels, the next logical target for the Nifty can be projected up to 12,200
New sustainable record highs on Indian bourses in the midst of global jitters caught many by surprise, reinstating the fact that Indian indices are in a long-term bull market as it continued to climb the wall of worries.
The relentless upmove on the Nifty from the recent lows of 10,557 added almost 1,000 points in the last 6 weeks. It took the index towards its resistance levels placed around 11,500 from where a fresh breakout is required on long term charts. This should further facilitate a multi-month upmove.
This vertical upmove after a pause of two months led the technical oscillators into overbought zones, warranting a correction in the near term, which appears to have unfolded from the highs of 11,495 last Friday.
In the worst case scenario, this correction may get extended up to 11,200 on the downside before resuming its upmove. In case of a fresh breakout above 11,500 levels, the next logical targets can be projected up to 12,200 for the index.
Here is a list of 3 stocks that could return 5-8 percent:
Mahindra & Mahindra: Buy| Target: Rs 1020| Stop Loss: Rs 927| Return 8%
With new lifetime highs of 953 in last Friday’s session, this counter appears to be on the verge of a fresh breakout from its contracting structure in which it was moving since May 2018 after registering highs of 933.
Hence, momentum shall pick up the pace once it registers a sustainable close above 950 levels. In such a scenario we can project a target of Rs 1,020. Hence, positional traders are advised to buy into this counter for the said targets with a stop below 927 on a closing basis.
Bharat Petroleum: Buy| Target: Rs 429| Stop Loss: Rs 380| Return 7%
For the last couple of sessions, this counter appears to be moving in a range of 404 – 384 levels and looks ripe for a breakout from this range. Hence, positional traders in anticipation of such a breakout shall go long for a target of 429 and a stop of 380.
Asian Paints: Buy| Target: Rs 1490| Stop Loss: Rs 1390| Return 5%
After the recent correction from the highs of Rs 1490, this counter appears to have posted bottom around recent lows of Rs 1394.
As price patterns are slowly shaping up in a positive fashion one can buy into this counter for a test of lifetime highs placed around Rs 1490. A stop suggested for this trade is 1390.Disclaimer: The author is Chief Strategist – Technical Research & Trading Advisory. 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.