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April series has begun on a good note for the Nifty, with the index rising around 2 percent so far. As such, the Street has entered a phase of consolidation, after falling around 10 percent from the all time highs witnessed in January.
The Nifty, in the last week, witnessed the continuation of the short-term pullback that had originated from sub-10,000 levels in the penultimate week. However, experts feel that it would be wise to use pullback rallies to short the index.
The pullback has done descent retracement of the previous fall and has now reached a crucial resistance zone i.e. 10300-10350. There are multiple parameters, lying over there, to restrict further upside.
“Going ahead, we expect the Nifty to extend consolidation towards 10450 and form a base in the broad range of 10450 – 9950, which would pave the way for the next leg of upmove,” ICICIdirect.com had said said in a report.
Brokerage firm Karvy has come out with its top 10 value picks for this month based on technical analysis.
Bajaj Finance | Rating: Buy | Target: Rs 1,973 | Stop Loss: Rs 1,590
The brokerage house highlighted that the company was in a consolidation phase since its all time high of Rs 1,985 and has formed a descending triangle chart pattern during the phase in daily line chart and has given breakout from the pattern with jump in volume and a breakaway gap.
Among the oscillators, MACD is trading above the signal line with broadening bands in daily charts which suggests positive momentum in the counter. Another major indicator Stochastic suggests positive momentum in the counter.
The recent price action suggests the momentum in the stock to continue in the coming month as well. Thus, we recommend buying the stock for targets of 1973 and 2035 levels with a stop loss placed below 1590 levels.
Coal India | Rating: Buy | Target: Rs 310 | Stop Loss: Rs 259
The stock price has broken the streak of lower lows on the same chart indicating that going forward the recent low is most likely to hold, reversing the trend to positive from medium term perspective.
On the indicator front, the monthly RSI has generated a bullish crossover as a long bullish candle stick has been formed which has been supported with above average volumes, all indicating to a positive bias in the counter and re iterating our view on the stock.
We recommend short to medium term investors to enter the stock at the current levels and any dip towards the short term moving averages may be used to add more keeping stop loss below previous major swing lows for the targets of 52 wk highs and much higher.
Divis Labs | Rating: Buy | Target: Rs 1,200 | Stop Loss: Rs 1,000
The stock has resumed its up move after making swing low of around 533 levels and bounce in the stock has seen supportive volume formation on daily charts. Prior to that, the stock has seen profit taking from its life time high of 1381.60 levels which has dragged the stock to the low of around 533 levels. Thereafter, the stock has resumed its up move and retraced 61.8% of retracement levels drawn from the high of 1381.60 levels to the low of 532.65 levels and managed to close well above the same.
The recent bounce in the stock from its swing low of around 533 levels has given “U” shape recovery on weekly charts which indicates strength in the counter and stock is well placed to take its up move. On the momentum setup, 14-period weekly RSI is pointing northwards after giving positive crossover with signal line on daily time frame which is showing strength in the counter.
The stock is on the verge of giving price breakout around 1130- 1135 levels. The move above the said levels will provide fresh trigger to the stock and stock can touch 1200- 1225 levels in near term. Hence, we are suggesting buy in the stock for the target of 1225 levels with stop loss placed below 1000 levels.
Exide Industries | Rating: Buy | Target: Rs 242 | Stop Loss: Rs 205
In the short term time frame, analyzing the price volume action, the stock seems to be extremely poised to move higher towards the psychological mark of 245-250 levels. On the other side, the Bollinger band (20, 2) on the daily charts is also pointing northwards with price rolling on its mean indicating the direction of the counter is on the long side with supports on the lower side shifting higher with the lower band. Also the Parabolic SAR is also trading well below the current market price of the counter indicating northward movement is likely to continue.
The stock is also trading above the cluster of major short and long term moving averages with technical indicator 14 day RSI showing reading in the comfortable zone, clearly indicating the bullish trend is likely to remain intact in the counter. On the other hand, the overall chart structure of the counter seems to be bullish from a medium term perspective till the stock price is trading above 205-210 levels on the lower side, while dips towards the recent support levels of 211 may be utilized to average the stock.
Taking the above data facts into consideration, we recommend short term traders to enter the stock at the current levels for the potential targets of 242-248 levels. Any dip towards the 211 levels may be utilized to average the stock with a strict stop loss
placed below 205 levels.
Hindustan Unilever | Rating: Buy | Target: Rs 1,469 | Stop Loss: Rs 1,199
Hindustan Unilever has been defying the broader market fall and has been holding onto the psychological 1300 levels on a weekly closing basis from the past few weeks. The overall chart structure of the FMCG MNC looks good as the stock is just moving out of its consolidation zone around current levels.
As mentioned earlier, in the recent past, the stock has been consolidating comfortably above all the mentioned EMA’s like the 21, 50 and 200 day EMA at Rs.1319, Rs.1324 & Rs.1236 respectively, thereby indicating the inherent strength in the counter. Though the stock ended the month of March 2018 with a meager gain of 0.52%, it outperformed the broader index Nifty (-2.59%) by a significant margin during the same period even as the global sentiment was dampened due to various reasons.
The stock also has immediate hurdle around the Rs.1375 mark, crossing and sustaining above which a good round of buying could be seen in the counter in its run up towards reclaiming the lifetime highs and in its run up to the mentioned target levels.
We expect Hindustan Unilever to continue its uptrend towards the target levels in the uncharted territory. Therefore, we recommend buying the FMCG major around current levels, average around Rs.1260 with a strict stop loss placed below Rs.1199 for potential upside targets of Rs.1469 - Rs.1480 in about a month’s time.
Larsen & Toubro | Rating: Buy | Target: Rs 1,442 | Stop Loss: Rs 1,180
The stock in the recent past has been consolidating, and this consolidation has been happening comfortably above all the mentioned EMA’s like 21, 50 and 200 day EMA at Rs.1301, Rs.1306 & Rs.1225 respectively, thereby indicating the counter is in the firm grip of the bulls. The stock ended the month of March, 2018 with a reasonable gain of 1.46% simultaneously outperforming the broader index Nifty (-2.59%) by a considerable margin during the same period.
The stock also has immediate hurdle around the Rs.1340 -1360 zone, therefore crossing and sustaining above the said zone, an excellent round of buying may come in the counter in its run up towards the targets and also helping the stock in penetrating through the lifetime high area yet again.
The ADX (29.83) on the weekly timeframe is also currently trading just above the 25 mark suggesting that the stock is likely to witness more momentum if the stock surpasses the immediate resistance zone mentioned above, on a sustainable basis.
On the other hand, the 14 period RSI on weekly charts is currently at 56.78 levels, just a tad below the RSI Avg. The RSI is also on the verge of giving a positive crossover above the RSI Avg (57.68) clearly indicating that there is enough room for the stock to outperform on the upside.
Pidilite Industries | Rating: Buy | Target: Rs 995 | Stop Loss: Rs 845
The stock has seen a steady profit taking from the life time highs of Rs 971 levels which has dragged the stock to the low of around 845 levels in span of two months. Thereafter, the stock has bounced well and is taking support at 100 EMA and 21 EMA on every dip.
The recent bounce from the said support levels has placed the stock above its major moving averages on daily charts, which indicates strength in the counter. CCI(60) and Stoc(5,3,3) indicators in daily chart is showing bullish divergence indicating the stock is being accumulated by stronger hands on every dip.
On the momentum setup, 14-period weekly RSI is pointing northwards after giving positive crossover with signal line and, on daily time frame oscillator is currently rising towards overbought territory reaffirming underlying strength in the counter. The Parabolic SAR trading below the price on daily charts is strong enough to indicate the up move in the stock to remain intact.
Tech Mahindra | Rating: Buy | Target: Rs 704 | Stop loss: Rs 575
The stock has placed an all time high of Rs 749 in the start of Feb’15, post which it consistently dragged lower till 356 levels made in the start of June’17. Technically, stock has retraced exactly Golden Fibonacci Ratio 61.8% projected from the lows of 132 to an all time high of 749, depicting strong reversal point for the stock.
After placing a swing low of 356 in the start of June’17, stock witnessed a gradual but steady recovery in last couple of months; importantly the stock has consistently formed higher highs-higher lows since then. Currently, stock holds well above its major 200-DEMA and also above its 21 & 50-DEMA.
On the weekly technical setup, momentum oscillator 14-period RSI has tested overbought levels in the recent past and now cooling-off from the highs while on the daily setup it is consistently holding above 40-levels, reaffirming underlying strength in the counter. Also on Bollinger Band (20,2) stock price after testing lower band smartly rebounded towards upper band.
UPL | Rating: Buy | Target: Rs 800 | Stop Loss: Rs 665
On the monthly charts, the stock after taking a support placed around 680 levels and in the current closing month, the stock is trading well above the said support level which is a positive sign for the stock if considered on a shorter term time frame.
The stock is trading above all of the long, medium and short term major moving averages which supports the bullish bias for the stock. On the momentum oscillator front, the 14-day RSI is slightly trading below the 9-DEMA which suggests that the downward trend in the stock might continue. But if the stock breaches the said levels of 734 levels and touches 770 levels from a short term perspective, then one might expect some reversal in the stock
Considering all the above data facts, we recommend short to medium term investors to enter the stock at the current levels for the potential targets of 800-830 levels. And any correction towards the 675 levels can be utilized to average the stock keeping strict stop loss placed below 665 levels.
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