The Nifty is likely to consolidate within the range of 10,700 and 10,200. A decisive breakout on either side will confirm the future trend.
The Nifty started the session on Wednesday with a gap up, opening almost 100 points higher, but erased entire gains throughout the day. The index formed a bearish engulfing pattern on daily charts which suggests that bears are in charge once again.
In the market, auto stocks ended the session as worst performers whereas FMCG stocks outperformed the benchmark index for the day. The volatility index India, VIX, witnessed a rise of 3.51 percent in the previous trading session.
On the options front, 11,000 and 10,700 Calls added most open interest (OI) whereas 10,400 and 10,500 puts ended as most active.
Going forward, the Nifty is likely to consolidate within the range of 10,700 and 10,200 levels. A decisive breakout on either side will confirm the future trend.
A breakdown from the lower band of 10,200 may trigger selling pressure which may take the index towards 9,900.
On the other hand, 10,700 may act as immediate resistance; sustained trades above 10,700 may induce further rally towards 11000.
Here is a list of top three stocks which could give 8-9% return in the next 1 month:
MOIL: Buy| CMP: Rs.173.15 | Target Rs 187.50| Stop Loss Rs.165| Return 8.50%
After prolong corrective phase, the stock has witnessed a breakout from its consolidation pattern at 173.15 levels on the daily chart. The counter has taken a support at its 200-EMA on the weekly time frame charts.
Earlier, whenever the stock has retraced near its 200-EMA it has respected and moved higher from that level. Each candle has a closing above the prior candle close from the past three weeks which suggests strength in the prevailing trend.
A bullish crossover in the daily RSI is being witnessed which may induce a positive shift in the bullish momentum in the stock price. Traders can accumulate the stock in the range of 171–174.80 for the target of 187.50 with a stop loss below 165.
Wipro: Buy| CMP: Rs 323.15 | Target Rs 349 | Stop Loss Rs.308| Return 8%
On the daily chart, the price has surpassed its trendline resistance and witnessed a flag pattern breakout at 323.15. On the weekly chart, "above the stomach" candle stick pattern has formed which suggests the possibility of a bullish reversal.
Moreover, the price is trading above its 50-EMA which acted as a support in the previous two instances. A bullish crossover in the daily RSI is being witnessed which may induce a positive shift in bullish momentum in the stock price.
Traders can accumulate the stock in the range of Rs 320-326 for the target of Rs 349 and a stop loss below Rs 308.
GE Power India: Buy| CMP: Rs. 794.80| Target Rs 866| Stop Loss Rs.752| Return 9%
The stock after a steep correction has witnessed a breakout from its falling wedge pattern on the daily timeline. Moreover, the price has completed bullish Anti-Nen Star harmonic pattern on the weekly chart.
Furthermore, the counter has able to close above its 200-DEMA in Wednesday’s session which is acting as a strong support. The momentum oscillator RSI (14) is in bullish crossover and falling suggesting a continuation of bullish momentum.
Traders can accumulate the stock in the range of 786-804 for the target of Rsc866 and a stop loss below Rs 752.Disclaimer: The author is a Technical Research Analyst at Bonanza Portfolio 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.