By Dinesh Rohira
The Indian equity market made a decent comeback towards a weekend session after closing on negative regime ahead of current month’s F&O expiry and slipover of banking fraud.
On Friday’s trade, Nifty index surpassed a crucial support level placed at 10300 and decisively managed to close above its 100-days EMA level.
Although it witnessed a selling pressure on an intraday basis to slip at 10396 level, the sentiment continued on positive cues as it recoups losses and closed at 10491 level with 1.04 percent upside. Thus it signaled a bullish sentiment in the market after series of bearish drought.
With current level rebounding above a crucial 100-days level placed at 10410, the index formed a strong bullish candlestick pattern on its daily price chart although a weekly chart has yet to confirm the trend.
Further, the secondary momentum indicated an upward move with RSI moving at 54 levels from previous low. Based on Fibonacci retracement, the resistance is currently placed at 10623 followed by 10752 and important support level is placed at 10330.
A breakout from important moving average level will certainly enable index to attempt to breach 10600 levels on a short-term basis and it will be advisable to trade with a strict stop-loss regime for the long position below 10350 on a closing basis.
The selloff from foreign counterpart still evokes a concern, and thus we maintain a weekly rangebound trade at 10370 levels on downside and 10710 levels on upside.
Here is a list of top three stocks which could give up to 12% return in the short term:
Engineers India Ltd: BUY| Target Rs191 | Stop-loss Rs160 | Return 12%
Engineers India Ltd (EIL) witnessed a healthy consolidation from Rs198 levels towards Rs159 levels before proceeding to its current uptrend regime.
The scrip made an important breakout from 200-day EMA last week despite trading on the sideways direction and signaled a positive upward trend.
Further, it managed to accumulate a support for volume growth across the price movement.
The scrip formed a solid bullish candlestick pattern on its weekly price chart coupled with bullish crossover just happening at current level on its MACD.
Thus, a rebound at the current level is expected to create next lag of uptrend towards its 52-weeks high in the medium term.
The support level for scrip is currently placed at 154 and resistance level is seen at 199. We have a BUY recommendation for Engineers India which is currently trading at Rs. 170.80
Apex Frozen Foods Ltd: BUY| Target Rs. 744 | Stop-loss Rs680| Return 5%
Despite continuing on uptrend trajectory on its long-term price chart, Apex Frozen Foods witnessed a consolidation over a two weeks period. The scrip took a major support at 640-630 level and gradually managed to rebound on bullish momentum.
The scrip ended the session with about 10 percent upside on intraday basis indicating a reversal trend. On the daily price chart, the scrip made a bullish reversal pattern after making a bearish trend for the consecutive session and thus indicated a positive sentiment for the forward session.
Further, the RSI at 64 levels has given a favorable price regime to enter coupled with positive cues on MACD.
With price trading above its 20-day EMA (660), the scrip is now facing a resistance at 791 levels and support level at 670. We have a BUY recommendation for Apex Frozen Foods which is currently trading at Rs. 708
IIFL Ltd: SELL | Target Rs. 702 | Stop-loss: - Rs. 750 |Upside: - 5%
IIFL continued to consolidate on its daily price movement although it attempted to breach upward and witnessed a sustained free fall to trade at a lower level.
The scrip made a breakout below its 20-day EMA level indicating a further decline in price and continued to shred about 5 percent on weekly basis.
On the weekly price chart, it formed a strong bearish candlestick pattern which is expected to keep the stock under pressure without any major breakout in short-term.
Further, the secondary momentum indicator suggested a current level placed at its lower support band which is a negative signal.
The Signal Line and MACD continued to indicate weak support for the scrip. The stock is facing a resistance at 754 levels and support at 693 levels which will remain crucial for scrip. We have a SELL recommendation for IIFL which is currently trading at Rs. 735.75
Disclaimer: The author is Founder & CEO, 5nance.com. 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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