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The Nifty50 started the week on a muted note despite BJP clinching a majority in Tripura, but weak global cues proved to be sentiment dampener for D-Street. The index slipped below its crucial support placed around 10,400 in morning trade and the next big support is placed around 10,300 levels, suggest experts.
A majority in Tripura Assembly elections is definitely positive for markets. BJP is holding ground in large states such as UP and Bihar, and has now started conquering states that were alien to them so far, becoming a much stronger pan India party.
“BJP has built enough cushion from unexpected negative surprises from existing states. The market is likely to take it positively. A short-term rally can be expected on the backdrop of assembly election win but the profit-booking at a higher level is unlikely to sustain the rally,” Dinesh Rohira, Founder & CEO, 5nance.com told Moneycontrol.
“It will be advisable to trade with caution on the strict stop-loss regime, and we continue to maintain a rangebound trade at 10630 levels on upside and 10320 levels on the downside,” he said.
The Nifty remained within a range of 200-point which is by far a thinner range for the benchmark. But, most analysts agree to one thing that it is a sell on rise kind of market as Nifty witnessesupply pressure whenever it comes closer to 10,600 levels.
The Nifty formed a bearish candle on Thursday on daily charts and a shooting star kind of patterns on the weekly basis which has bearish connotations.
“For the coming week, we are keeping a close eye on the 10,400 mark as we now can see an ‘Upward sloping Trend Line’ converging around this point. A sustainable breach below this crucial support would result in a sharp correction towards 10,300 followed by 10,140,” Sameet Chavan, Chief Analyst- Technical & Derivatives, Angel Broking Pvt Ltd told Moneycontrol.
“With a near-term view, we continue to remain cautious on the market but ideally we would be convinced to go short only after seeing few days of more such time-correction or a relief rally to retest the higher range of 10640,” he said.
We have collated a list of ten stocks which hold potential to give up to 14% return in the short term:
Analyst: Sameet Chavan, Chief Analyst- Technical & Derivatives, Angel Broking Pvt Ltd
MCX Ltd: BUY| Target Rs855| Stop Loss Rs734| Return 11%
This underperforming stock remains to be our preferred trading bet as we expect it to give a decent relief rally after forming a strong base around Rs700 during the first half of February.
Largely on expected line, the counter managed to recover a fair bit of ground and due to last week’s positive traction, it adds further conviction to our contradictory bullish stance on the same.
The index formed a ‘Bullish Hammer’ on the weekly chart which is showing its impact and now the stock prices have closed above the ’20-day EMA’ for the first time in the recent past.
Hence, we continue to recommend buying for a revised target of Rs.855 over the next few days. The stop loss now can be fixed at Rs. 734.
Syndicate Bank: BUY| Target Rs67| Stop Loss Rs57| Return 12%
We are in no mood of making any kind of bottom fishing in the ‘PSU’ banking counters; but, there is a notable observation we came across last week in ‘Nifty PSU Bank’ index.
The index hastened towards its multiple supports zone of 2928 and rebounded from a kissing distance of it. The entire space is deeply oversold and it certainly calls for some breather in the form of a relief rally.
Obviously, you need to be very selective while picking up the right proposition from the basket. In our sense, ‘Syndicate Bank’ seems better positioned and has stronger chart structure.
The ‘Bullish Hammer’ on weekly charts is providing some support and the price development during the week indicates a possibility of a decent bounce back towards the 67 mark. One can take contradictory bet by following a strict stop loss at Rs.57.
Zee Entertainment Ltd: SELL| Target Rs527| Stop Loss Rs570| Return 5%
This media giant enjoyed its multi-year Bull Run started way back in 2012. Due to its steady performance, this stock certainly became the ‘Portfolio Pick’ for so many investors over the past few years.
However, last month and a half has not been that great as we witnessed the deterioration of nearly 10% from its recent peak in such a short span. In fact, the way short-term charts are shaped up, we may see some more pain in days to come.
On the daily chart, the stock prices have confirmed a breakdown below its crucial support of 560 on a closing basis. Thus, we expect this underperformance to continue for a while. Our immediate target would be around Rs.527, and one can look to go short with a strict stop loss of Rs.570.
Brokerage: SMC Global Securities
IGL: BUY| Target Rs335| Stop Loss Rs288| Return 9%
The stock closed at Rs 306.15 on 1st March 2018. It made a 52-week low at Rs193.36 on 23rd May 2017 and a 52-week high of Rs344.90 on 1st January 2018. The 200-days Exponential Moving Average (EMA) of the stock on the daily chart is placed currently at Rs 279.31.
After testing its all-time high, the stock witnessed selling pressure and tested 275 in a single downswing. Then after, the stock started consolidating in the range of 280 to 310 levels for five weeks and formed an “Ascending Triangle” on the weekly charts, which is bullish in nature.
Apart from this, there is a decent rise in volumes as well which indicates that bias is looking positive for the stock. Therefore, one can buy in the range of 300-303 levels for the upside target of 330-335 levels and a stop loss below 288.
NIIT Technologies Ltd: BUY| Target Rs970| Stop Loss Rs810| Return 11%
The stock closed at Rs 871.40 on 01st March 2018. It made a 52-week low at Rs 404.25 on 03rd March 2017 and a 52-week high of Rs. 928.75 on 25th January 2018. The 200 days Exponential Moving Average (EMA) of the stock on the daily chart is currently at Rs 633.88.
As we can see on the chart that stock is continuously trading in higher highs and higher lows on weekly charts, which is bullish in nature. Apart from this, it was also forming an “Inverted Head and Shoulder” pattern on daily charts and has given the neckline breakout of same.
Last week, the stock ended over 4% gains and formed a long bullish candle, which indicates that follow up buying can continue for coming days. Therefore, one can buy in the range of 855-860 levels for the upside target of 950-970 levels with SL below 810.
Analyst: Rajesh Palviya, Head – Technical & Derivatives Analyst, Axis Securities
IDBI Ltd: BUY| CMP Rs80.50| Target Rs92| Stop Loss Rs72| Return 14%
IDBI is in an uptrend on the short-term charts and has been forming a higher top and higher bottom formation. Since October 2017, the stock was seen in a major consolidation mode within 55-70 band on the daily chart.
It gave a breakout at 70 levels and is now sustaining well above the same. On the weekly chart, the stock has given a breakout of previous swing high placed around Rs73 on the weekly closing basis with high volume action indicates bullishness ahead.
Both weekly and daily strength indicator along with the momentum indicator are in bullish territory and sustaining well above their reference lines which signal that the strength and upward momentum is there in the price.
Chart pattern suggests that stock may exhibit bullishness and it may scale up towards 88-94 level in the coming few weeks.
Voltas Limited: BUY| CMP Rs617.05| Target Rs660| Stop Loss Rs580| Return 7%
The most prominent observation on the price chart of Voltas is that the entire consolidation was underway since December 2017 and till date, it has formed a down-sloping trend line.
The breakout of this trend line is witnessed at 590 levels on the weekly chart. The stock is sustaining above its 20, 50, 100 day EMA which supports the bullish sentiments ahead.
On the volumes front, the stock has witnessed a significant rise around the breakout level indicating increased participation on the rally.
Both weekly and monthly strength indicator such as RSI along with the momentum indicator Stochastic are in the bullish territory and are now sustaining above their reference lines which signals strength and upward momentum in the price.
Thus, taking into consideration the above factors, the maximum upside can be expected to 650-660 while a stop loss can be kept below Rs580 levels.
NIIT Technologies Ltd: BUY| CMP Rs868.05| Target Rs940| Stop Loss Rs815| Return 8%
NIIT Technologies is in an uptrend across all the time frames forming a higher top and higher bottom formation. Since February 2017, the stock was in a major consolidation mode within 850-750 band on the daily chart.
It gave a breakout at 850 levels and is sustaining above the same. On the weekly chart, the stock has given a breakout from the down-sloping trendline placed at 830 levels.
The stock is also sustaining above its 20, 50 and 100 and SMA which supports bullish sentiments ahead. Both weekly & monthly strength indicator RSI along with the momentum indicator Stochastic are in bullish territory and sustaining above their reference lines which signals strength and upward momentum in price.
Thus, taking into consideration the above factors, the maximum upside can be expected to 920-940, and a stop loss can be placed below 815 for all long trades.
Aurobindo Pharma Ltd: BUY| CMP Rs622.50| Target Rs665| Stop Loss Rs585| Return 7%
The most prominent observation on the price chart of Aurobindo Pharma is that the entire consolidation under way since Dec 2017 till date has formed a down-sloping trend line.
The breakout of this trend line is witnessed at 608 levels on the weekly chart. The stock is sustaining above its 20, 50, 100 day EMA which supports bullish sentiments ahead.
On the volumes front, the stock has witnessed significant rise around the breakout level indicating increased participation on the rally.
Both weekly & monthly strength indicator RSI along with the momentum indicator Stochastic are in bullish territory and sustaining above their reference lines which signals strength and upward momentum in price.
Thus, taking into consideration the above factors, the maximum upside can be expected to 650-665, and a stop loss can be kept below 585 for all long trades.
Analyst: Dinesh Rohira, Founder & CEO, 5nance.com
Inox Wind Ltd: BUY| Target Rs149 | Stop-loss Rs126 | Return 10%
Inox Wind witnessed a strong rebound on its daily price chart after remaining under pressure for the last two consecutive sessions.
The current price band just got above its important level of 20-50-200-days moving average on last trading session and witnessed a strong volume growth.
The scrip made an intraday high at 140 levels although it slipped below to settle with about 9 percent gain. The scrip formed a strong bullish candlestick pattern on its daily price chart coupled with bullish sentiment from its MACD and Signal Line.
Further, a reasonable RSI level at 55 and crucial breakout in the last session supports a short-term uptrend. Support level for scrip is currently placed at 120 and resistance level is seen at 157. We have a BUY recommendation for Inox Wind which is currently trading at Rs. 135.30
Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their 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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