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Last Updated : Jan 29, 2018 09:15 AM IST | Source: Moneycontrol.com

Trade with strict stop losses in the run-up to Budget; 4 stocks which could give up to 10% return

The index is expected to remain tight on a rangebound level with 11,110 on upside which will also act as immediate resistance and 10,950 on the downside.

 
 
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Dinesh Rohira

5nance.com

Despite witnessing a minor setback on the backdrop of F&O expiry during the last trading session, the Nifty index surpassed a crucial psychological 11,000 level in last week’s trade on a closing basis.

After successively closing in a positive trajectory for the last six straight days, the index managed to hit the upper band on its long-term price channel, signaling positive cues on the medium term.

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However, weak cues and selling pressure from the select-sector turned a caution sentiment to close 16 points down at 11,069 levels.

Although the bullish stance remained intact on its long-term price chart, the index formed a bearish ‘hanging man’ kind of pattern on the daily chart indicating a restraint trade at the current level.

Further, the secondary momentum indicator signed at overbought zone with RSI at 75 levels which is expected to keep index under pressure on the backdrop of profit-booking.

However, the breakout from its upper band on the long-term price chart is expected to keep the index on uptrend trajectory in the medium term.

With the important event coming this week, the Union Budget 2018 coupled with a sharp rise in crude oil price and weak global cues, the index is expected to witness sideways direction with a negative bias on a short-term basis.

The index is expected to remain tight on a rangebound level with 11,110 on upside which will also act as immediate resistance and 10,950 on the downside. It will be advisable to stay caution and maintain strict stop-loss on a long position.

Here is a list of top 4 stocks which could give up to 10% return in the short term:

Ashiana Housing Ltd: BUY | Target Rs. 206 | Stop-loss Rs177 | Return 10%

Ashiana Housing witnessed a healthy consolidation from 233 levels to trade towards 160 level prior to its current uptrend momentum.

The scrip made a crucial breakout from its long-term moving average level during the last session and ended the week on a positive trajectory with about 5 percent gain on an intraday basis.

After making a breakout from 200-EMA levels, the stock formed a solid bullish candlestick pattern on its weekly price chart, indicating a continued momentum at the upper level.

The secondary momentum indicator further suggests a strong support for bullish sentiment at a current price level with RSI at 55.7 levels coupled with MACD witnessing a crossover from its Signal Line.

The immediate support level for scrip is currently placed at 180 followed by 172 and resistance level is seen at 215. We have a BUY recommendation for Ashiana Housing which is currently trading at Rs. 186.55

Caplin Point Laboratories Ltd: BUY| Target Rs689 | Stop-loss Rs631 | Return 6%

Caplin Point made a crucial breakout from the 200-days EMA levels during the last trading session with about 6 percent gain on an intraday basis.

The scrip managed to hit the upper band on its weekly price at 672 levels although it failed to sustain the level and closed at 648 levels.

On the weekly price chart, the stock made a bullish candlestick pattern despite a sluggish movement in early trade and directed a positive momentum to hit upper band.

Further, the RSI at 55 levels has given a favourable price regime to enter coupled with bullish crossover on MACD at 15 taking place at current trend.

The current breakout from 50 and 200-days EMA level has indicated a strong support for uptrend trajectory. The scrip is facing a resistance at 697 levels and support level at 628. We have a BUY recommendation for Caplin Point Laboratories which is currently trading at Rs. 648.45

Crompton Greaves Consumer Electricals Ltd: SELL | Target Rs226 | Stop-loss Rs250 | Return 5%

Crompton Greaves Consumer Electrical continued to consolidate on its daily price movement from its 52-week high level and witnessed a sustained free fall to trade at a lower level.

The scrip made a breakout below the lower band indicating a further decline in price and slipped below its crucial support zone with about 10 percent decline 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 price is currently below its all level coupled with bearish crossover on its momentum indicator, thus indicating a negative outlook.

The stock is facing a resistance at 257 levels and support at 223 levels which will remain crucial for scrip. We have a SELL recommendation for Crompton which is currently trading at Rs. 237.60

Phillips Carbon Black Ltd: BUY | Target Rs1320 | Stop-loss Rs1260 | Return 4%

Despite trading on sideways direction, Phillips Carbon continued to maintain uptrend trajectory on its long-term price chart and gave a crucial momentum breakout during last session from its 20-days EMA with about 6 per cent gain on weekly basis.

Further, the scrip managed to hit the upper band at 1307 level although it slipped to close at 1274. A positive breakout from its short-term moving average coupled with stronger volume growth enabled the scrip to form a strong bullish pattern on its daily price chart.

On secondary momentum indicator, which supports the bullish uptrend with RSI at 55 coupled with MACD showing crossover from its signal-line, strengthening the positive trajectory.

The scrip is resistance at 1337 level and support at 1233 level. We have a BUY recommendation for Phillips Carbon which is currently trading at Rs. 1274.05.

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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First Published on Jan 29, 2018 09:15 am
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