Ashish Chaturmohta
Domestic equity markets saw a flat start to the week after the Nifty ended Monday at 10,807. Market participants remained cautious ahead of the Karnataka assembly election results after exit polls predicted a hung assembly.
After touching a new high of 10,835 on Monday for the current rally, the index formed a doji candlestick pattern for the day, indicating indecisiveness in the market. Technically, the index continues to hit higher highs and higher lows and now, sustaining above 10,770, the index can rally towards 10,910-10,940.
On the down side, immediate support is seen at 10,770. If it breaks below that level, profit booking can be seen at the next support level, which is placed at 10,680 and 10,620.
On the Nifty options front, the maximum open interest for puts is seen at a strike price of 10,500. For call options, the maximum open interest is seen at a strike price of 11,000, which is likely to act as resistance for the market. Addition of open interest was seen in the 10,700 and 10,800 puts, suggesting that the market's base is moving higher.
Here is the list of five stocks that can give up to 17 percent return:
Uniply Industries Limited: Buy | CMP: Rs 456 | Stop loss: Rs 435 | Target: Rs 520 | Return: 14 percent
The stock is long term uptrend forming higher tops and higher bottoms on weekly chart. For the last month, the stock has been consolidating in a range of Rs 485 and Rs 360 levels. In the month of April price had rallied to Rs 486 levels on high volumes indicating buying participation in the stock. Recent price correction from the high has taken support at 21-day exponential moving average and given bounce back.
Yesterday stock witnessed strong price momentum and high volumes resuming its uptrend. Relative strength index and Stochastic oscillator have given positive crossover with their respective averages suggesting stock is likely to touch higher levels. Thus, stock can be bought at current levels and on dips to Rs 448 with stoploss below Rs 435 for target of Rs 520 levels.
Buy Edelweiss Financial Services Limited: Buy | CMP: Rs 300 | Stop loss: Rs 283 | Target: Rs 350 | Return: 17 percent
At the start of February month this year stock corrected sharply from Rs 290 odd to Rs 224 levels. Subsequent bounce back faced resistance at Rs 280 levels and price corrected again to test the low of Rs 224.
Since then price has rallied back to its all-time high levels. On the daily chart stock has formed bullish double bottom pattern over three-month period and seen breakout on good volumes. For the last couple of weeks price has seen consolidation above the breakout level.
Yesterday stock witnessed strong price momentum and high volumes resuming its uptrend. Relative strength index and Stochastic oscillator have given positive crossover with their respective averages suggesting stock is likely to touch higher levels. Thus, stock can be bought at current levels and on dips to Rs 294 with stop loss below Rs 283 for target of Rs 350 levels.
The Phoenix Mills Limited: Buy | CMP: Rs 651 | Stop loss: Rs 620 | Target: Rs 725 | Return: 11 percent
The stock has tested Rs 570-560 levels on multiple occasions and seen bounce back. Largely stock has been consolidating between Rs 700 and Rs 560 odd levels almost for last five months with strong support at lower levels.
Now, stock is again moving up from lower end of this range. After last three weeks of sideways consolidation between Rs 650 and Rs 590 odd levels price has given breakout on upside.
Daily MACD has given positive crossover with its average above neutral level of zero suggesting consolidation phase is over and stock is starting uptrend. Thus, stock can be bought at current levels and on dips to Rs 640 with stop loss below Rs 620 for target of Rs 725 levels.
Intellect Design Arena: Buy | CMP: Rs 210 | Stop loss: Rs 201 | Target: Rs 230-240 | Return: 10-14 percent
In the month of February stock touched 52-weeek high of Rs 205 and then corrected down to Rs 162 levels. The high was made on above average volumes while correction was below average volumes indicating buying participation in the stock on rallies and long positions holding onto the stock on declines.
Stock has rallied to new 52-week of Rs 217 and formed round bottoming out pattern. Price is currently trading above the breakout level and consolidating above it. Price has also retraced 61.8 percent Fibonacci retracement level of the major decline from Rs 278 to Rs 92 levels that comes around Rs 209 levels.
Daily MACD has given positive crossover with its average above neutral level of zero suggesting consolidation phase is over and stock is starting uptrend. Thus, stock can be bought at current levels and on dips to Rs 206 with stop loss below Rs 201 for target of Rs 230-240 levels.
Reliance Infrastructure Limited: Sell | CMP: Rs 396 | Stop loss: Rs 410 | Target: Rs 360 | Return: 9 percent
The stock is in downtrend forming lower tops and lower bottoms. Price continues to trade below its long term and short-term moving averages. The stock had been trading in range of Rs 470 and Rs 405 odd levels for more than three months.
Yesterday price witnessed break down from this range with bearish candlestick and above average volumes. Price has also given breakout from Bollinger bands with expansion of bands suggesting trend likely to continue the downside.
Thus, stock can be sold at current levels and on rise to Rs 400 with stop loss above Rs 410 for target of Rs 360 levels.
Disclaimer: The author is Head of Technical And Derivatives at Sanctum Wealth Management. The views and investment tips expressed by investment expert on moneycontrol.com are his 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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