The Nifty rose 0.8 percent for the week ended April 20 and held onto to its crucial support placed at 10,500 levels. The index gained for the fourth straight week but the momentum seems to have disappeared. It is likely to face stiff resistance near 10,600-10,640 levels.
“There are a few technical pieces of evidence that justify 10,600-10,640 levels. First, post the Union Budget, the Nifty corrected from 10,638 and 10,631 on two occasions, which will now act as a strong hurdle,” Sameet Chavan, Chief Analyst, Technicals and Derivatives at Angel Broking, said.
This coincides with its 50 percent Fibonacci retracement of the recent fall from 11,171.55 to 9,951.90. Also, the upward sloping trendline connecting previous bottoms (9,687.55 and 10,276.30) is now converging around the same area.
Chavan sees the index heading to 10,750 levels if 10,600 is breached. “As a chartist, traders are respecting this zone of 10,600–10,640. In case of violation of this hurdle in the upward direction on a sustainable basis, we may see the relief rally getting extended 10,720–10,750. But it certainly does not change the broader outlook, as we still expect the possibility of selling pressure resuming at higher levels.”
He advises traders to stay light for a while, focusing on key levels and adopting a stock-centric approach for the next few days.
As far as support levels are concerned, 10,495 followed by 10,355 would now be crucial.
We have collated a list of top 10 stock ideas from different experts which can offer up to 22% return in the next 30 days:
Analyst: Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in
Tata Motors: Buy| Target Rs 372| Stop loss: Rs 327| Return: 10%
This counter is in a downtrend and remains an underperformer. It is moving in a well-defined down sloping channel since the highs of Rs 598 per share registered in September 2016. It again approached the demand line of the said channel, which attracted buying support and propped up prices from the lows of Rs 330 per share a couple of weeks back.
After retracing major part of the said pullback rally from Rs 325-372 levels, this counter appears to have formed a base around Rs 332 per share and looks ready for a take-off. Hence, positional traders should go long for an initial target of Rs 372 per share with a stop of Rs 327 per share.
PNB Housing Finance: Buy| Target Rs 1,469| Stop loss: Rs 1,297| Return: 8%
After the recent breakout above its 200 daily moving average, this counter slipped into consolidation phase and appears to have resumed its upswing from the said congestion zone of Rs 1,360–1,290 levels. In such a scenario it should head towards its logical target of Rs 1,469 per share. Hence, positional trade can create longs for the said target with a stop of Rs 1,297 per share.
Motherson Sumi: Buy| Target: Rs 372| Stop loss: Rs 332| Return: 6%
This counter appears to have resumed its upmove after trading in the recent congestion zone of Rs 350–335. After sustaining above Rs 340 levels, it can be expected to head towards its logical targets of Rs 372 per share. The stop suggested for the trade is Rs 332 per share.
Analyst: Sameet Chavan, Chief Analyst, Technicals and Derivatives at Angel Broking
Wockhardt: Buy| Target: Rs 863| Stop loss: Rs 748| Return: 8%
Post the correction in January, the stock slipped into consolidation mode. After three months, the stock burst through this congestion zone and confirmed a neckline breakout from the inverse head and shoulder pattern. Volumes during this price action were almost thrice its average daily volumes, indicating strong buying interest after the base building process. We expect the stock to extend this rally and eventually climb towards our near-term target of Rs.863 per share. Traders are advised to follow a strict stop loss at Rs748 per share.
Bata India: Buy| Target: Rs 857| Stop loss: Rs 763| Return: 7%
Since the last couple of weeks, this stock has been consolidating in a small range. On Friday, we witnessed a surge in the last couple of hours of trade. The surge was quite abrupt but confirmed a breakout from the near-term hurdle of Rs 791 per share on a closing basis. This was accompanied by massive volumes, providing credence to this move. One can look to go long for a target of Rs 857 per share by following a strict stop loss of Rs 763 per share.
Ramco Systems: Buy| Target: Rs 535| Stop loss: Rs 442| Return: 10%
The breakout from the bullish flag continuance pattern signals resumption of the next up leg after a couple of days breather in the stock. After correcting over 60% from its 2015 peak, the stock has been languishing in the Rs 600-350 range for over a year. In the current week, a swift rally backed by unusually high volumes indicates that the stock has attracted the attention of market participants as most midcap IT stocks have seen a decent rally over the past few months.
The bullish flag formation on the daily chart indicates a breather after the sharp rally and provides a fresh entry opportunity to ride the next up leg. The stock is likely to accelerate momentum and head higher in the near-term towards Rs 535 per share as it is the 80% retracement of the most recent down leg from Rs 572 to Rs 353 per share.
Zensar Technologies: Buy| Target: Rs 1,125| Stop loss: Rs 935| Return: 11%
The share price of Zensar Technologies has been trading in a rectangle formation by oscillating within a broader range of Rs 750–1,130 per share since August 2015. Over the past 15 months, the stock made multiple failed attempts to sustain above the Rs 960 mark, indicating stiff resistance at that level. The stock logged a breakout from the past 11 week’s consolidation range of Rs 857–997, backed by heavy volumes, indicating a resumption of the uptrend.
Among oscillators, the weekly moving average convergence divergence (MACD) found support from its nine week average and is now pointing upward. The Relative Strength Index (RSI) has retested earlier breakout levels indicating an acceleration of momentum after forming a base above the zero line.
The stock’s momentum is likely to accelerate and head higher in the near-term towards Rs 1,125 per share as it is the implicated target of the weekly consolidation (Rs 997-857) coinciding with identical highs near the upper band of the rectangle pattern of Rs 1,130 per share. On the downside, immediate support remains around Rs 935 per share as it is the placement of eight week’s exponential moving average (EMA) coinciding with the current week’s low.
D-Link: Buy| Target: Rs 126| Stop loss: Rs 102| Return: 22%
The D-Link stock has registered a breakout above the bullish flag pattern signalling a positive bias. The breakout was accompanied by strong volume of more than three times the 200-day average volume of 3 lakh shares per session, indicating larger participation in the direction of the trend. Thus, supporting continuance of the positive trend.
During the previous week, the stock witnessed a strong rebound from the support area of Rs 81 per share and rallied to Rs 112 per share in just three sessions. Post this, the index consolidated for the last three sessions during which it retraced its previous up move by just 23.6%, signalling a positive price structure.
We expect the stock to continue its current upmove and test levels of Rs 126 per share being the confluence of the 61.8 percent retracement of the entire decline from Rs 153 to Rs 81 and the high of February 2018 around Rs 126 levels.
PNC Infratech: Buy| Target Rs 205| Stop loss: Rs 166| Return: 15%
The share price of PNC Infratech remains in an uptrend, forming a rising peak and trough on the weekly chart. The stock has rallied to an all-time high of Rs 228 per share in December 2018. Since then, it has been in a corrective decline for the last three months. The recent price activity suggests that the corrective decline has approached maturity and is likely to resume a fresh upmove.
The stock has recently rebounded from the support area of Rs 150-155 per share, being the confluence of its 52-week EMA and 80 percent retracement of the previous up move from Rs 130 to Rs 228. The sharp upmove in the last two weeks from the support area signals a reversal of the corrective trend and offers a fresh entry opportunity. We expect the stock to continue with its current upmove and test Rs 211 per share, being the 80 percent retracement of the entire decline from Rs 228 to Rs 148 per share.
Godrej Properties: Buy| Target: Rs 850| Stop loss: Rs 685| Return: 9%
Godrej Properties’ share price was consolidating in a broader range of Rs 728–859 per share over the past two months. During this two month consolidation, the stock has taken support from the gap area of January 8 on multiple occasions, indicating sturdy base formation around Rs 728 levels.
At present, it registered a breakout from the falling trendline drawn adjoining subsequent high of Rs 912–849 supported by above average volumes, indicating termination of an intermediate correction. Among oscillators, RSI found support at its one-year long support base of 35, pointing upward, confirming base formation. The stock is likely to head higher in the near-term towards Rs 850 per share, which is the placement of identical highs coinciding with the upper band of the broader consolidation range of Rs 859-728.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.