Most experts feel that the bull run remains intact but advise traders to remain cautious as the Nifty approaches crucial resistance levels of 11,900-12,000.
The Nifty rose over 1 percent for the week ended August 31 despite mild profit booking in the second half. The index closed positive in three out of last five trading sessions.
The fall in the rupee, which touched a new low of 71/USD, caused a scare but it wasn’t enough to put investors off, with the week being the sixth consecutive positive close for the index.
Most experts feel that the bull run remains intact but advise traders to remain cautious as the Nifty approaches crucial resistance levels of 11,900-12,000. Support for the index is placed at 11,639.
“If we compare the price action of the week gone by and the previous one, we can clearly see it was quite identical in nature. On both occasions, the beginning was good but the market struggled to sustain at higher levels. We would have interpreted this as a caution if the damage was bigger,” Sameet Chavan, Chief Analyst, Technicals, and Derivatives at Angel Broking told Moneycontrol.
“But, since it’s not the case, we would rather construe this as a sign of strength considering the small but crucial recovery on Friday. Since the chart structure still does not show any weakness, we would continue with our positive stance and would reiterate that the index is heading towards 11,900 quite soon,” he said.
Chavan further added that the immediate resistances for the forthcoming week can be seen at 11,728-11,760. On the flipside, this week’s low of 11,639 would now play a major role in protecting the downside.
On the sectoral front, pharma and metal have been the outperforming stocks along with IT stocks, thanks to a weak rupee.
Here is a list of top 10 moneymaking ideas from various experts, which have the potential to give 5-17 percent return in 1 month:
Analyst: Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in
Hero MotoCorp: Buy| LTP: 3253| Target: Rs 3418| Stop Loss: Rs 3180| Return 5%
This counter appears to have posted a short-term bottom around 3190 levels after retracing 50% of its last leg of the upswing from the lows of 3033 – 3350 levels.
Hence, positional traders can make use of this opportunity to go long for an initial target of 3350 levels with a stop of 3180. But, once 3350 is conquered a bigger target towards 3418 can’t be ruled out.
Bajaj Auto: Buy| LTP: Rs 2746| Target: Rs 2900| Stop Loss: Rs 2690| Return 5.6%
After a sharp fall from Rs 3150 levels, this counter appears to be consolidating in the range of Rs 2600 – 2770 levels for the last couple of weeks and looks ripe for a breakout.
In such a scenario the range target itself can be Rs 2930 kind of levels. Hence, one should make use of this consolidation phase to go long for a target of Rs 2900 levels with a stop below Rs 2690 on a closing basis.
Analyst: Anand James Chief Market Strategist at Geojit Financial Services
Century Textiles: Buy| CMP: Rs 977.65| Target: Rs 1050| Stop Loss: Rs 930| Return 7.4%
The steep fall since January 2018 has been slowing from May onwards, and a rounding bottom pattern is in formation.
Successful penetration of neckline adds conviction, and should ideally see a vertical rise from here on unless the stock gets pulled down below Rs 950.
L&T Finance Holding Ltd: Buy| CMP: Rs 181.60| Target: Rs 200| Stop Loss: Rs 173| Return 10%
The stock recently made a few unsuccessful forays above the horizontal resistance level of 185. The presence of several consolidation patterns encourages us to see more upsides, and we believe that once a 185 is conquered successfully, moves above 200 could be expected.
MACD and RSI are showing signs of exhaustion, which calls for entry to be made on dips rather than chasing prices higher.
Deepak Nitrite : Buy| CMP: Rs 261.10| Target: Rs 280| Stop Loss: Rs 250| Return 7%
The pullback from August peaks has now retraced 50%. Horizontal support of 253 is also close by, hinting at a swing higher. MACD and RSI in the hourly charts are showing oversold signs reversal.
Analyst: Rajesh Palviya, Head – Technical & Derivatives Analyst, Axis Securities Ltd.
Bharat Forge: Buy| LTP: Rs 679| Buying Range: 675-663| Target: 717| Stop Loss: Rs 645| Return 5.6%
On the daily chart, the stock price has formed an “Inverse Head & Shoulder" pattern - a short-term reversal pattern which signals a shift in the short-term trend reversal to the upside.
On the weekly chart, the stock has decisively broken out from its consolidation range of 670-580 levels on a closing basis and is now sustaining above the same.
This breakout is accompanied with a huge spurt in volumes which supports the bullish sentiments ahead.
The daily and weekly strength indicator RSI and the momentum indicator Stochastic both are in the positive terrain which supports upside momentum to continue in the near term. The stock is well placed above its 20, 50 and 100 day SMA which supports bullish sentiments ahead.
Sun Pharma Advanced Research Company Ltd: Buy| LTP: 400.45| Target: Rs 430| Stop Loss: Rs 383| Return 7.5%
On the weekly chart, the stock price has turned around from its multiple major support zone on a closing basis and is sustaining above the same. This turnaround is accompanied with rising volumes which supports bullish sentiments ahead.
The daily and weekly strength indicator RSI and the momentum indicator Stochastic both are in the positive terrain which supports upside momentum to continue in the near term. The stock is well placed above its 20, 50 and 100-day SMA which supports bullish sentiments ahead.
MindTree: Buy| LT: Rs 1112.55| Target: Rs 1192| Stop Loss: Rs 1054| Return 7%
On the weekly chart, the stock price has decisively broken out from its consolidation range of Rs 1100-910 levels on a closing basis and is sustaining above the same.
This breakout is accompanied with rising volumes which supports the bullish sentiments ahead. The daily and weekly strength indicator RSI and the momentum indicator Stochastic both are in the positive terrain which supports upside momentum to continue in the near term. The stock is well placed above its 20, 50 and 100-day SMA which supports the bullish sentiments ahead.
Analyst: Sameet Chavan, Chief Analyst, Technicals, and Derivatives at Angel Broking
Wockhardt: Buy| LTP: 664.05| Target: Rs 730| Stop Loss: Rs 629| Return 10%
The ‘Pharma’ index has clocked whopping gains in the past three months, but ‘Wockhardt’ remains subdued and has clearly underperformed its larger peers by a fair margin. Now in last three weeks, the stock has made some attempts to show its existence.
We can now observe a series of ‘Higher Top Higher Bottom’ formation with ‘RSI-Smoothened’ indicating further strength in prices.
Hence, we expect this to have some catch-up rally to its other peers. The potential upside target can be foreseen at Rs.730 and a stop loss placed at Rs.629.
OBC: Buy| LTP: Rs. 84.25| Target: Rs 99| Stop Loss: Rs 75.80| Return 17%
The PSU banking basket has been a big failure and has seen a massive wealth destruction for many investors over the past few years. Now, looking at recent development, it appears that the sector is trying to show some revival.
How far this would last, the time will tell; but, few stocks within this basket are potential candidates to give some relief moves.
‘OBC’ has broken out from the recent congestion zone and has surpassed its hurdle of 81 with some authority. On Friday, there was a pullback towards the breakout point and this dip was immediately bought into.
One can look to go long for a positional target of Rs 99 in coming weeks. The stop loss now can be placed at Rs 75.80.Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol are their own, and not that of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.