If the momentum continues, the index is all set to climb Mount 12K and hit a target around 12,400-12,700 in the next 12 months, according to experts.
Nifty50 has rallied about 13 percent so far in FY19 and if experts are to be believed, it is on track to hit fresh record highs in FY20. The optimism in market lately has been on the back of hopes of a stable government post elections, strong buying by foreign investors, rate cut by Reserve Bank of India and stability in rupee-dollar pair.
Historically, we have seen a decent rally in the market before and after the general elections. This year also, Nifty has formed a new base in the 10,600 – 11,000 zone and has been witnessing pre-election rally in the last few weeks.
If the momentum in market continues, Nifty could touch 12,000 and hit a target around 12,400-12,700 in the next 12 months, according to experts.
“If we go by the principle of ‘history repeats itself’; then this general election year (FY20) can be a good year for investors as we may see a good rally in the coming few months. FIIs are aggressively putting money into the Indian market and cumulatively bought equities worth Rs 41,900 crore in last 23 sessions,” Jay Kumar Purohit, Technical & Derivatives Analyst at Centrum Broking told Moneycontrol.
“Looking at the chart structure of Nifty and its heavyweight constituents, we are expecting the Nifty to rally towards 12,400 – 12,700 levels in the coming months. Thus, we advise long-term traders to use any decline towards 11,000 as a buying opportunity,” he said.
Investors should invest funds in tranches as it is going to be a volatile year for Indian equities.
Here is a list of 15 stocks that could give 14-70% return in the next 12 months based on technical chart patterns.
The returns are calculated based on the closing price as of March 27:
Analyst: Prakash Pandey, Head- Research, Fairwealth Securities
ICICI Bank: Buy| LTP: Rs 393| Target: Rs 490| Stop Loss: Rs 343| Upside 24%
The stock is trading well above all the crucial moving averages (EMA-21, 63, 200) days. It gave a buy signal on the daily/weekly/monthly time frame charts.
In the last few weeks, we have seen big delivery buying by FIIs which will protect this stock from any major downside. It formed a very decent base around Rs. 340-345 zone which will act as crucial support for the index.
In the last few quarters, ICICI Bank has made significant progress on the NPA recovery front and Gross NPA for the bank has improved significantly.
ICICI bank is trading at a Price/Book of 2.5 times, which is quite attractive if we compare the same with other industry peers like Kotak Mahindra Bank or HDFC for that matter.
Sun Pharma: Buy| LTP: Rs 464| Target: Rs 640| Stop Loss: Rs 405| Upside 38%
Sun Pharma saw a big correction from its recent 52-week high. It fell more than 35 percent from its 52-week high. But, as per the daily and weekly charts, the stock has formed a decent bottom around Rs 410-415 zone.
The stock price action from the last two weeks is showing serious sign on revival and the stock has given a buy signal on the weekly charts on our parameters.
It is trading well above EMA (21, 63) days, indicating the stock is ready for an up move. Last quarter result from Sun Pharma also signaled hope for the long-term investors which makes it a good buy at current level.
Godrej Properties: Buy| LTP: Rs 853| Target: Rs 1080| Stop Loss: Rs 690| Upside 26%
Godrej Properties has given a big breakout on the daily as well as weekly charts last week. The stock has given a clear breakout above Rs. 770 levels. It is now trading well above EMA (21,63,200) days.
The momentum oscillators are also suggesting a big upside in the stock. From the last few weeks, serious delivery buying was seen in the stock with positive price action which indicates big upside for a long-term point of view.
Godrej Properties is one of the finest real estate company in India. It has a very strong balance sheet, unlike other real estate players in the country.
ITC: Buy| LTP: Rs 293| Target: Rs 360| Stop Loss: Rs 264| Upside 23%
The stock after a long consolidation gave a breakout on the daily as well on the weekly charts. The stock is now trading well above all the crucial medium to long-term moving averages.
ITC formed a decent base around Rs 265-275 zones, so this zone will now act as a big support area for the stock. Once the stock close above Rs 305 on a weekly basis, we can see a swift move towards our target price of Rs 360.
In terms of fundamentals, the stock is also trading at a very attractive valuation, if we compare this stock with Hindustan Unilever. ITC is due for serious P/E re-rating.
Kajaria Ceramics: Buy| LTP: Rs 567| Target: Rs 720| Stop Loss: Rs 488| Upside 27%
Kajaria has given a clear breakout on the weekly as well as monthly charts, after its multi-month downtrend. The stock is trading well above its EMA-21, EMA-63 & EMA -200, indicating a strong positive trend for the stock.
From the last few days, the stock is recording a delivery percentage of more than 70 percent which is a very positive sign from long term point of view.
Analyst: Jay Kumar Purohit, Technical & Derivatives Analyst at Centrum Broking
Nestle India: Buy| LTP: Rs 10,853| Target: Rs 12400| Stop Loss: Rs 9998| Upside 14%
The stock is moving in a strong uptrend by making higher highs as well as higher lows on the weekly chart. Recently, the stock has corrected by around 15 percent from its ‘52 weeks high’ of Rs 11751.
However, it took support around the ‘200 EMA’ on the daily chart, which also acted as strong support in recent past too. The price is consolidating in a sideways direction from the last few days and formed an ‘Inverse Head & Shoulder’ pattern on the daily chart.
We expect the uptrend to continue and advise our clients to buy the stock for the target of Rs 12,200 – 12,400. The stop-loss of the trade set-up should be kept at Rs 9,998.
State Bank of India: Buy| LTP: Rs 308| Target: Rs 365| Stop Loss: Rs 280| Upside 18%
The stock is moving in a sideways direction and is making ‘Lower Highs and Higher Lows’ on the weekly time scale. The consolidation phase of the last few months has resulted into a formation of a ‘Symmetrical Triangle’ pattern on the weekly chart.
Currently, the stock is on the verge of giving a breakout from the mentioned pattern. The confirmation of a breakout shall come on a weekly close above Rs 310 level.
However, looking at the trendline breakout in momentum oscillator ‘RSI’ on the weekly chart, we are anticipating the breakout in the stock. We advise traders to accumulate the stock for the target of Rs 350 – 365, and a stop-loss of Rs 280.
Page Industries: Buy| LTP: Rs 24498| Target: Rs 30,000| Stop Loss: Rs 21,800| Upside 22%
The stock has seen a decent selling pressure from the start of September 2018 and corrected towards 61.8 percent retracement level of the previous rally from Rs 12,121 to Rs 35,977.
The stock gave a false breakdown from the ‘Rising Trendline’ and formed the ‘Hammer’ candle on the weekly chart. The mentioned candlestick pattern was followed by positive momentum, which is a good sign for the market.
The stock breached the sequence of making a lower high and lower low on the monthly chart after six consecutive month and forming a ‘Bullish Engulfing’ pattern in the ongoing month.
Considering the current chart structure, we are expecting the stock to rally towards Rs 29,000 – 30,000 levels in coming months. Thus, one can buy the stock in the range of Rs 23,500 – 24,000 with a stop-loss of Rs 21,800.
Pidilite Industries: Buy| LTP: Rs 1225| Target: Rs 1500| Stop Loss: Rs 1108| Upside 22%
The stock is moving in a strong uptrend and is trading around its all-time highs. Currently, we are witnessing a breakout from the continuous Inverse Head & Shoulder pattern on the weekly chart, which is a positive sign for the stock.
The momentum oscillator ‘RSI’ also gave trendline breakout and moved above 60 mark on the weekly time scale, showing strength in the counter.
The current chart structure clearly indicates that the stock is heading towards Rs 1430 – 1500 levels in coming months. Hence, investors can accumulate the stock in the zone of Rs 1180 – 1230 with a stop-loss of Rs 1108.
DCB Bank: Buy| LTP: Rs 203| Target: Rs 260| Stop Loss: Rs 170| Upside 28%
Recently, the stock gave a breakout from the ‘Falling Trendline’ on the weekly chart and is sustaining above the same. Also, we witnessed a breakout from ‘Inverse Head & Shoulder’ pattern on the daily time scale which is a positive sign for the stock.
The momentum oscillator ‘RSI’ is also moving northwards in both weekly as well as monthly chart and thus showing strength in the counter.
At the current juncture, we advise investors to buy the stock in the zone of Rs 190 – 200 for the target of Rs 245 – 260 in the coming few months. The stop-loss for the mentioned trade should be placed at Rs 170 level.
MT Educare: Buy| LTP: Rs 65.30| Target: Rs 110| Stop Loss: Rs 40| Upside 70%
This low volume stock has corrected sharply in the last two years and took support around Rs 113 percent retracement level of the previous rally, which is placed around Rs 44.55 level.
The stock made a ‘Double Bottom’ pattern on the weekly chart and formed a ‘Bullish Engulfing’ candlestick pattern at the recent bottom.
We are also witnessing the formation of ‘Higher Highs Higher Lows’ on a weekly scale after many months, which is a positive sign as per ‘Dow Theory’.
At the current juncture, the strong hurdle for the stock is placed around Rs 73 levels and a close above the same may lead to a rally towards Rs 98 levels.
However, looking at the reversal bullish candlestick pattern (at the bottom) and the positive divergence of ‘RSI’ on the monthly chart, we are anticipating a breakout in the stock.
Thus, we advise investors to buy some quantity of the stock at the current level and add more on a close above Rs 73 for a target of Rs 98 and Rs 110. Currently, stop-loss should be placed at Rs 40 level, which can be a trail to Rs 56 level once stock closes above Rs 73 mark.
Analyst: Aditya Agarwala, Senior Manager, Technical Analysis, YES Securities
Aurobindo Pharma: Buy| LTP: Rs 776| Target: Rs 1000| Stop Loss: Rs 695| Upside 28%
On the weekly chart, Aurobindo Pharma is on the verge of a breakout from a sideways consolidation channel pattern.
The neckline of the pattern is placed at Rs 825, and a sustained trade above Rs 825 with healthy volumes will trigger a bullish breakout extending the bull trend to levels of Rs 900-1000.
On the monthly chart, RSI has taken support at the 50-level during this sideways consolidation affirming that the uptrend is still intact in the stock suggesting a bullish breakout on cards in the coming trading sessions.
Further, MACD is also on the verge of making a bullish crossover confirming the bullishness. The stock can be bought in the range of Rs 760-790 for the target of Rs 900-1000, keeping a stop loss below Rs 695.
Mahanagar Gas: Buy| LTP: Rs 1020| Target: Rs 1160| Stop Loss: Rs 940| Upside 14%
On the weekly chart, Mahanagar Gas has broken out from an Ascending Triangle pattern triggering a fresh bull trend. Further, volumes have been healthy in this breakout confirming the bullishness.
The stock is also trading comfortably above its previous peak of Rs 965 forming a higher high which a sign of bullishness.
RSI is also above 60 level after taking support at the 50-level suggesting higher levels in the coming trading sessions. The stock can be bought in the range of Rs 980-1010 for targets of Rs 1100-1160, and keep a stop loss below Rs 940.
Tata Motors: Buy| LTP: Rs 169| Target: Rs 280| Stop Loss: Rs 130| Upside 65%
On the monthly chart, Tata Motors has turned upwards after forming a hammer candlestick pattern on the monthly time frame at its previous bottom formed in September 2011.
Currently, however, it is facing resistance at the Rs 200 mark a sustained trade above this level will take the stock higher to levels of Rs 250-280.
Moreover, RSI is placed at an extremely oversold zone on the monthly time frame indicating a short covering rally may be in the offing. The stock can be bought in the range of Rs 170-175 for targets of Rs 250-280, keeping a stop loss below Rs 130.
Voltas: Buy| LTP: Rs 623| Target: Rs 710| Stop Loss: Rs 575| Upside 14%
On the weekly chart, Volta has broken out of a Symmetrical triangle pattern triggering a fresh bull trend.
On the daily time frame, however, it is facing minor resistance from a downtrend line placed at Rs 630 a sustained trade beyond this trendline will resume the uptrend.
RSI has taken support at the 60 levels in the recent correction suggesting that the bulls have an upper hand in the stock. The stock can be bought in the range of Rs 610-615 for targets of Rs 670-710, and keep a stop loss below Rs 575.
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