Podcast | Stock picks of the day: Nifty rally likely to continue; 3 stocks which could give 6-14% return

There is limited risk-reward for any fresh longs in the index from the current levels but traders should now focus on specific stocks and sectors.

There is also an emergence of negative divergence pattern between Nifty and Nifty Bank.

The Bank index needs to close decisively above 28,350 levels for a range breakout and to resume its uptrend, which would provide momentum to the Nifty as well.

The current momentum in Nifty looks positive as the prices are trading above their short-term averages. One can expect the uptrend to continue as long as the 11500 supports are held.

The higher counts and pattern structure indicate that this rally is likely to continue on the upside and can go beyond 12,300 levels.

Here is a list of top three stocks which could give 6-14% returns in next 1 month:

Reliance Capital: Buy| LTP: Rs 469.85| Target: Rs 535| Stop Loss: Rs 445| Return 14%

The price formed a bullish Hammer candlestick at the support zone and has breached an internal falling trend line which confirms a trend reversal

Castrol India: Buy| LTP: Rs 158.95| Target: Rs 175| Stop Loss: Rs 153| Return 10%

There is an emergence of the positive divergence pattern in the RSI along with bullish reversal candlestick.

Dr Reddy's Laboratories: Buy| LTP: Rs 2,491| Target: Rs 2,650| Stop Loss: Rs 2,400| Return 6.3%

A bullish breakout on the monthly charts and momentum indicators have given a positive crossover.

Disclaimer: The author is CMT- Head of Research, Indiabulls Ventures Ltd. The views and investment tips expressed by investment experts on Moneycontrol are his own, and not that of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.