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Last Updated : Sep 23, 2019 01:08 PM IST | Source: Moneycontrol.com

'Tata Motors above Double Bottom Neckline; may break out with a 21% upside'

Bollinger band volatility breakout can come above 11,300 marks which can add further strength to the current up move.

Moneycontrol Contributor @moneycontrolcom
 
 
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Shabbir Kayyumi

The strong policy push by the Finance Ministry to revive the economy has dramatically lifted the sentiment. Nifty managed to close above 200 DMA after trading below this indicator for almost 2 months.

Moreover, India VIX is trading below its 20 days moving average which is standing around 16.20 levels. This shows room for a further smart rise. Bollinger band volatility breakout can come above 11,300 marks which can add further strength to the current up move.

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The immediate destination for Nifty is 11,706 as that coincides with prior minor peak. Though the pattern target for Double Bottom formed by Nifty is around 11,500, the momentum can take the target higher by 1.61 times implying major resistance around 11,856 levels. Any subsequent fall will find important support at 11,189

Banking index has managed to close above last 6 week’s high, forming strong long body bullish candlestick pattern. A sustained move above 20 weeks moving average placed around 29,500 will give a fresh breakout and prices can extend higher towards 30,871 levels. Post the breakout, important support level for Bank Nifty is 28,834.

Here are five stocks with 16-21 percent upside:

Dixon Technologies | Rating: Buy around: Rs 2,650 |Target: Rs 3,100 | Stop Loss: Rs 2,350 | Upside: 16 percent

This stock has completed a Double Bottom pattern in the weekly chart, at the same time it was forming a Flag Formation in the daily timeframe. It is currently trading above its key long term moving averages namely the 50 and 200 SMA, indicating medium and longer term trend on the upside is intact and accelerating.

The momentum indicator RSI too is above its key 60 marks indicating momentum on the positive side. We recommend a buy in Dixon around Rs 2,650 with a stop loss of Rs 2,350 target Rs 3,100.

Ipca Laboratories | Rating: Buy around Rs 965 | Target: Rs 1,050 | Stop Loss: Rs 923 | Upside: 8 percent

It’s currently trading above its key long term moving averages namely the 50 and 200 SMA, indicating medium and longer term trend on the upside is intact and accelerating. Until recently, it was undergoing a larger time frame consolidation which we think took a pause. The momentum indicator stochastic too is above its key 60 mark indicating momentum on its side. We recommend buying in IPCALAB around Rs 965 with a stop loss of Rs 923 for a target of Rs 1,050.

Supreme Industries | Rating: Buy around Rs 1,145 | Target: Rs 1,260 | Stop Loss: Rs 1,075 | Upside: 10 percent

It has been in a range for almost a year until recently. It is on the verge of giving a breakout which is confirmed by positive readings in key momentum indicators namely the RSI which is currently above 60.

It is currently trading above its key long term moving averages 50 and 200 SMA, indicating medium and longer term trend on the upside is intact and accelerating. As long as it is trading with higher high and higher low pattern, we suggest a buy in SUPREMEIND around Rs 1,145 with a stop loss of Rs 1,075 for a target of Rs 1,260.

Tata Motors | Rating: Buy around Rs 128 | Target: Rs 155 | Stop Loss Rs 119 | Upside 21 percent 

It’s currently trading above its key short term moving averages namely the 9 and 21 EMA, indicating short and medium term trend is uptrend. It recently witnessed a thrust from a Double Bottom formation and is holding itself just above the neckline.

The momentum indicator MACD too is above 0 line with bullish crossover indicating positive bias. We recommend a BUY in TATAMOTORS around rS 128 with a stop loss Rs 119 with a target of Rs 155.

Ashok Leyland | Rating: Buy around Rs 66 | Target: Rs 80 | Stop Loss: Rs 58 | Upside 21 percent

This stock has completed a Double Bottom in the daily chart which was accompanies by a positive divergence in the daily RSI indicator, indicating higher probability of up move. It’s currently trading above its key short term moving averages namely the 9 and 21 EMA, indicating short and medium term trend on the upside.

Faster retracement after forming second swing bottom, very well augurs with bulls. We recommend a buying Ashok Leyland Limited around Rs 66 with a stop loss of Rs 58 with a target of Rs 80.

(The Author is Head of Technical & Derivative Research at Narnolia Financial Advisors.)

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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First Published on Sep 23, 2019 01:03 pm
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